Digging Deeper into this week’s RNX Kambalda Gold Bonanza

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    Geologist Michaela Flanigan reports for MiningIR from Australia:

    Henry Dole found the rich patch and said: "I nearly fell over at the sight of the sparkling rocks" (image - ABC)
    Airleg miner Henry Dole found the rich patch and said: “I nearly fell over at the sight of the sparkling rocks” (Image – ABC Goldfields-Esperance: Jarrod Lucas)

    There was a sensation in the Australian mining and prospecting community on September 9th, when Royal Canadian Nickel (TSXV:RNX) announced the discovery of a gold ‘motherlode’ in its Beta Hunt Mine.  A single blast uncovered two enormous specimen stones of 95 and 63kg, containing 2,440 and 1,620 ounces of gold. Henry Dole, a veteran of sixteen years in the mines, is credited with the discovery, working under the guidance of Senior Geologist Zaf Thanos.

    The two main stones were recovered in a cut of just 44m3 from 130 tonnes of ore, which produced a total of 9,250 ounces for an eye-popping grade of 2,200 grams/tonne.  Ending any suggestion that this was a one-off event, RNC followed up with the announcement a further 1,300 ounces from 50kg on September 16, doubling the strike length of the high-grade structure.

    These pieces come on the heels of a similar but smaller find in the Hand of Faith zone of the mine last year, which delivered a museum-quality sample containing around 1000 ounces of gold. The specimen pieces from the most recent discoveries are destined to be auctioned as collector’s items, while the remaining gold will go to Beta Hunt’s usual customer: the Perth Mint.  In honour of the auspicious day of its discovery, the new lode has been dubbed the ‘Father’s Day Vein’.

    One of the 'Father's Day vein' specimens from the TSXV:RNX Beta Hunt mine in Australia
    One of the ‘Father’s Day vein’ specimens from the TSXV:RNX Beta Hunt mine in Australia (Image – ABC Goldfields-Esperance: Jarrod Lucas)

    This find was no accident.  Rather, it was the result of a deliberate strategy at Beta Hunt to focus on small-scale mining in specimen gold areas, which has seen its grades increase for six consecutive quarters to 3.14 grams/tonne at the end of July.  The mine had also begun targeting deeper sections of the host Lunnon Basalt formation than before, after drilling indicated improving grades with depth. This resulted in an increase in indicated resources from 92,000 ounces to 239,000 ounces in December 2017.

    The geological setting of the mineralisation gives significant potential for further deposits along strike and down dip, or in parallel gold lodes. Indeed, the model that directed geologists towards this discovery was developed when enrichment in the A Zone and Western Flanks of Beta Hunt was found to repeat in the less well-understood Fletcher trend.

    The Beta Hunt Mine sits in the Kambalda region near the mining hotspot of Kalgoorlie, approximately 630km east of Perth. Although the Kalgoorlie area is best known as a gold field, Beta Hut was run from the 1970s as a nickel operation, with gold extraction only commencing in 2015. The nickel mineralisation in the region occurs, predictably, in a Kambalda-type deposit.

    A close-up look of the Beta Hunt gold vein (Image - ABC Goldfields-Esperance: Jarrod Lucas)
    A close-up look of the Beta Hunt gold vein (Image – ABC Goldfields-Esperance: Jarrod Lucas)

    In this scenario, Ni-Cu-PGE-rich komatiites containing little sulphur interact with sulphur-rich material at the surface of the Earth, causing chalcophile elements to partition into a sulphide melt.  In the case of Beta Hunt, this process occurred when the Kambalda Komatiite flowed over the Lunnon Basalt, and it was along this contact that nickel and previous gold mineralisation were found.

    The Father’s Day find was the first at the site to be located entirely within the Lunnon Basalt, and is associated with two narrow (<0.3m) sediment layers within the Lunnon formation.  These horizons consist of strongly pyritic black shales located around 150m below the basalt-komatiite contact, and regionally signify the boundary between the Upper and Lower Lunnon Basalt.

    Geologists at the mine believe that gold-bearing fluids interacted with this reducing, sulphur-rich horizon, allowing for the growth of large gold crystals. In particular, the Father’s Day Vein occurs in a zone of dilation and shearing, which would have concentrated fluid flow during the gold deposition event.

    The discovery of the extent of this mineralisation process in well-documented strata opens up new potential for gold exploration in the Kambalda region.  The Beta Hunt mine stands to gain particularly from this, since it lies in a prime location on the Lunnon Basalt, which extends for kilometres at depth.

    On March 22, RNC had announced its decision to offer the Beta Hunt Mine for sale in order to increase its focus on its Dumont nickel project (see below).  This was in light of the company’s problems raising the capital to explore the Beta Hunt site, a situation which had led to uncertainty about the futures of its employees.

    Henry Dole, the miner who made the find, said that it had been a:

    ‘Much-needed boost for worker morale’

    RNC President and CEO Mark Selby noted that:

    ‘Beta Hunt should be of interest to both gold- and nickel-focussed companies, either of whom would be able to synergise its production with other operations in the Kambalda region’

    On July 23, the company announced that a preferred bidder had been identified and granted exclusivity, but this decision was revised on discovery of the Father’s Day bonanza.

    There was so much gold in the trucks that Beta Hunt mine workers were checking vehicle wash bays and gutters to avoid losing any! (Image - ABC Goldfields-Esperance: Jarrod Lucas)
    There was so much gold in the trucks that Beta Hunt mine workers were checking vehicle wash bays and gutters to avoid losing any!
    (Image – ABC Goldfields-Esperance: Jarrod Lucas)

    Naturally, the mine is now expected to attract dramatically more interest.  Other selling points include over 100 million AUD invested in an extension of the underground ramp system, an expert team of 114 employees already established, and a desirable position close to the infrastructure of one of the largest mining provinces in the world.

    RNC shares jumped on the announcement of the Father’s Day find, from a price of 0.09 CAD the previous trading day to 0.28 CAD on the day following the announcement.  They continued their climb after the follow-up discovery, peaking at 0.425 CAD on September 18.  The find is expected to generate around 11.6 million USD in immediate revenue for the company.

    RNC is a nickel-focussed company whose chief asset is the Dumont Nickel Project in Québec, a shovel-ready deposit expected to become the world’s fifth largest nickel-sulphide operation after development.  Dumont contains proven and probable nickel reserves of approximately 1,177 million tonnes at 0.27%, and is also believed to be the second largest undeveloped cobalt reserve in the world.

    The mineralisation occurs in a serpentenised dunite layer of a large sill that intrudes the Superior geologic province. In addition to Dumont and the Beta Hunt Mine, RNC has a 27% stake in the copper-gold producing Reed Mine in Manitoba, which will cease operation in Q4 2018.  RNC also owns stakes in exploration projects at Qiqavik (Au), West Raglan (Ni-Cu-PGE) and part of the Hudbay Reed Exploration Joint Venture (Cu-Au).  The Beta Hunt Mine is operated by an RNC subsidiary, Salt Lake Mining Pty Ltd.

    A haul truck at the entrance to the underground portal at the Beta Hunt mine. (Image - ABC Goldfields-Esperance: Jarrod Lucas)
    A haul truck at the entrance to the underground portal at the Beta Hunt mine. (Image – ABC Goldfields-Esperance: Jarrod Lucas)

    Original content – written for MiningIR by Michaela Flanigan, an experienced research and exploration geologist based between projects in Germany and Australia


    MiningIR.com hosts a variety of articles from a range of sources, our content, while interesting, should not be considered as formal financial advice. Always seek professional guidance and consult a range of sources before investing.

    Disclaimer
    MiningIR host a variety of articles from a range of sources, our content, while interesting, should not be considered as formal financial advice. Always seek professional guidance and consult a range of sources before investing.

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