Kalamazoo hammers into WA project to upgrade gold resource

Kalamazoo Resources has started hammering away at a 14,000-metre infill drilling program at its Ashburton gold project as the company seeks to upgrade its million-ounce Mt Olympus resource into a higher-confidence category.

The campaign will initially comprise reverse-circulation (RC) drilling, followed by diamond drilling, to ratchet up confidence in the resource and shift as many tonnes as possible into the higher-status indicated category.

Mt Olympus’ resource stands at 1.073 million ounces at an impressive gold grade of 2.7 grams per tonne (g/t) across its open-pit and underground deposits. The deposit makes up part of the company’s wider Ashburton project in the expansive Pilbara region of Western Australia.

Based on earlier, closer-spaced drilling, the bulk of the million-plus ounce resource is classified as indicated, with 821,000 ounces grading at 2.9g/t gold. The remaining 252,000 ounces fall within the inferred category. The company aims to pump these resources into the upgraded indicated status by completing the 20m-by-20m spaced drill program.

Additionally, the results from drilling at Mt Olympus will be used to increase geological confidence in the resource model, support future ore reserve estimates and provide key data for the preliminary feasibility study (PFS) being conducted on the deposit.

With the phase-one growth drilling program complete, we have commenced a major resource infill program aimed at increasing resource confidence and supporting the Mt Olympus pre-feasibility study. An RC rig is already on the ground, delivering rapid coverage across the deposit.

Ackerman said two diamond drill rigs are scheduled to start at site in early April and will provide critical geological and technical data required to underpin the next stage of the project’s development.

Ashburton’s global inventory comprises a stellar total resource of 16.2 million tonnes at 2.8g/t for 1.436 million ounces across four deposits, all on coveted mining leases. In addition to Mt Olympus, the company’s Peake deposit kicks in a solid 210,000 ounces at 3.4g/t and its Zeus deposit coughs up 121,000 ounces at 2.5g/t.

Rounding out the numbers, the Waugh deposit chimes in for a further 32,000 ounces of the precious yellow metal at a healthy 1.9g/t.

Kalamazoo says its Mt Olympus-West Olympus open-pit contains a mineable 772,000 ounces of gold at a grade of 2.53g/t. Its November 2025 scoping study, which assumed a gold price of A$4500 per ounce, zeroed in on a 524,000-ounce bounty to be mined over a 73-month life-of-mine.

The study spat out a compelling all-in-sustaining-cost of $2183 per gold ounce - highly profitable territory even at today’s slightly lower gold price of $4366 per ounce.

At the conservative base case of US$4500 per ounce, the project is expected to generate $747 million in pre-tax cash flow, rising to a whopping $1.396 billion at US$6000 per ounce.

Net present value (NPV) using an 8 per cent discount rate also takes a massive leap from $423 million to a significant $842 million using the higher assumed gold price.

In what may be a valuable add-on to the main production game, Kalamazoo recently identified considerable additional underground resources. The company outlined a standout exploration target of an additional 350,000 to 500,000 ounces grading an expected 2g/t to 3.8g/t, which it is now aiming to zero in on.

Assays released yesterday also revealed a series of head-turning results from expansion drilling at Mt Olympus, which is expected to bump up its gold inventory.

The star of the show was a 43.8m pearler grading 3.4g/t gold from 93m, including a 21m stretch running at 4.6g/t.

A shallow second hole from 20.5m depth ripped out an 8.8m block at 11g/t, while further out west, a third hole intersected 30.9m at a solid 1.5g/t gold from 214.5m, interspersed with higher-grade zones within the hole.

With expanding resources from the growth drilling campaign and its infill program now planning to bump the inventory up the classification chain, Kalamazoo could soon find itself on a golden path at the Ashburton project.

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