Kairos upgrades Mineral Resource at Pilbara Gold Project
Kairos Minerals Ltd (ASX:KAI) has released an updated Mineral Resource Estimate for the Pilbara Gold Project.
The new Mineral Resource of 873,500 ounces sets a strong foundation for Kairos as it commences mining studies and evaluates the best way to extract value from this significant asset at a time when the Australian dollar gold price is at record highs.
The update follows a detailed review of all historical data and drilling, a reinterpretation of the mineralisation envelope and a recalculation of the resource based on updated gold price assumptions.
On this note, the gold price is currently hovering in the vicinity of US$1,650 per ounce and the Australian dollar is fetching approximately US$0.66. This implies an Australian dollar gold price of $2,500 per ounce.
With the average production costs for Australian gold miners sitting around $1,300 per ounce and some producing at less than $1,000 per ounce, the margins are substantial.
This is increasing the financial returns generated by existing producers, while also adding to the commercial viability of projects for emerging players such as Kairos.
A mix of development and exploration on the horizon
In taking the buoyant gold price into account and assessing the group’s strategic direction across its portfolio of gold assets, Kairos executive chairman Terry Topping said, “The new Mineral Resource sets a strong foundation for us as we commence mining studies on the Pilbara Gold Project and evaluate the best way to extract value from this significant asset at a time when the Australian Dollar gold price is at record highs.
‘’While this work will be an important focus for us over the next 2 to 3 months, we have not lost sight of Kairos’ vast and strategic exploration portfolio in the Pilbara.
“In addition to the exciting 10 kilometre long Fuego gold-in-soil anomaly at our Croydon Project, we also have a number of potential intrusion hosted exploration targets at our Kangan Project, located on the margins of a significant granite intrusion.
‘’These opportunities are currently under review in light of the recent exploration success reported by De Grey Mining at their Hemi discovery, which lies just 20 kilometres north of our Kangan Project.”
Drilling at Mt York yields results
The significant increase in the Indicated Mineral Resource for the Mt York Deposit stemmed largely from the late 2018 RC drilling campaign, comprising 51 holes for 6,710 metres.
The Mt York gold deposit alone now has an Indicated and Inferred Resource of 17.2 million tonnes at 1.26 g/t gold for 697,700 ounces.
Management is still waiting for assay results from the December 2019 Iron Stirrup drilling program.
Iron Stirrup lies to the north of Mt York, and it currently has a resource of 86,000 ounces at slightly higher grades than Mt York.
A field trip to resample anomalous composites will be conducted once the weather and ground conditions improve following the recent cyclonic rains.
In assessing the prospects for the development of an open pit mine at the Pilbara Gold Project management has calculated the resources to obtain the global mineral resource and then applied a maximum depth for each deposit to obtain the resources that have a realistic chance of being extracted via open pit methods.
This is how the numbers stack up with the resource extending to a maximum vertical depth of 195 metres with the deposits remaining open both at depth and along strike.
Is Kangan a Hemi in the making?
On the exploration front, management is currently re-evaluating a number of intrusion hosted gold exploration targets at the Kangan Project in light of the recently reported Hemi gold discovery by De Grey Mining.
As indicated below, Kangan is located just 20 kilometres south of the Hemi discovery.
Since announcing that it was on to a winner with Hemi at the start of February, De Grey’s shares have increased five-fold, delivering a 400% capital gain to investors in a matter of weeks.
With Kairos progressing its exploration strategy at Kangan in tandem with determining how best to maximise shareholder returns at the Pilbara Gold Project, there are numerous share price catalysts in the mix.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
Publishers Notice
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.
