Relentless: Westgold goes for more Murchison gold

After the recent release of a serious resource upgrade at its Bluebird-South Junction mine in Western Australia, Westgold Resources has moved quickly to extend the site’s gold mineralisation with a resource definition campaign.

Just last month, the company increased the Murchison operation’s resource to 827,000 ounces – a significant lift of 134 per cent, or 474,000 ounces – building the project to a total of 6.4 million tonnes at 3.1 grams per tonne gold.

Drilling has already kicked off with three surface drill rigs and an additional underground drill rig to explore the down-plunge extents of the Bluebird orebodies that have historically produced more than a million ounces from open pit mining.

Management says the current program is focussed on South Junction, which has seen little exploration since open pit mining ended in 2013. To date, 18 drillholes for 16,400m have been completed from a planned program of about 26,000m.

Assays have been received for nine holes, with the remaining results still pending.

Drill highlights show some solid figures with a 10.45m hit going 3.8g/t gold from 788m with a deeper higher-grade intercept in the same hole delivering 3.98m grading 10.8g/t from 894.5m. A second hole also recorded positive results with 13.86m reading 4.49g/t from 574m, with a deeper 3.45m section at 5.21g/t from 589m in the same hole.

A third drill hit intercepted 6.14m going 8.27g/t from 780m, while a fourth hole produced 9.86m grading 4.32g/t from 579.6m.

Importantly, management says the orebody remains open to the north and it is developing an underground diamond drill platform to test the Bluebird North portion of the broader system. If successful, the company believes Bluebird North could present another option to expand mine production rates.

Developing the South Junction side of the Bluebird-South Junction system will open a new mining front and in conjunction with the Bluebird underground ore, will underpin production from our Meekatharra operations for many years.

Management says its ongoing drill campaign aims to investigate mineralisation in the link zone between Bluebird and South Junction and explore the down-plunge potential of the site. It believes an expansion could see ore production from the Bluebird mine increase from the current rate of about 500,000 tonnes per annum through its existing two declines with the addition of a new decline into South Junction.

Westgold’s Murchison operations include four underground mines, three development projects and two processing plants, all sitting between the regional WA mining towns of Meekatharra and Cue. The Bluebird underground mine is the primary supplier of gold-bearing ore and feeds its up to 1.8 million tonnes per annum processing plant, about 15km south-west of Meekatharra.

Earlier this year, the company revealed plans to merge with TSX-listed Karora Resources in a move that could see the combined entity produce 400,000 ounces of gold per year from a combined 13 million-ounce resource and more than 3 million-ounce reserve. Its corporate strategy is to make its biggest mines bigger and more productive in a bid to deliver increased free cash flow.

With the gold price continuing to sit above the $3560 per ounce mark, Westgold appears to be on track to cash in on its planned increase in production rates.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au