victorian gold mines, page-10

Before nickel, Poseidon was a race for gold.

Robin Bromby, Pure Speculation From: The Australian November 16, 2009

WHEN anyone mentions the world "Poseidon" you tend to think of 1969 and nickel.

But there was another Poseidon boom, or "push" as it was called at the time, and it was a gold one, named after the winner of the 1906 Melbourne Cup, a horse that according to one account may have been the greatest three-year-old ever to race in Australia.

The discovery was made at Tarnagulla to the west of Bendigo a few weeks after that year's big race. According to the official Australian year book, "a miner who had prospected the district for years obtained seven ounces of gold from a shaft 19 feet (just under 6m) deep, and some fairly large nuggets being found soon after, the so-called Poseidon rush set in".

The largest nugget weighed 953oz and two others weighed 703oz and 675oz. In all, 3000oz in nuggets were taken from a strip of ground 25m long.

The rush didn't last long and the shallow gold was soon worked out, but it was certainly spectacular while it lasted. However, it did show that there was still plenty of gold to be found in Victoria, even though much of the then colony had been given a good going over by prospectors since William Campbell made the first discovery at Clunes in 1850.

Kevin Nichol is hoping to emulate the Victorian prospectors of yesteryear with his $3 million initial public offering for Victorian Gold Mines (VGM) now under way. Nichol said in the five days since the IPO opened it had become clear that applications would have to be pared back and some money returned. Nichol, who some will remember as the man who ran Bowen Energy (BWN) before the large Indian shareholder there wanted greater say, had once been a financial analyst for the late Kerry Packer's Consolidated Press Holdings.

VGM's strategy is much like that of the old-timers who had never heard of resource drilling or bankable feasibility studies. It will target known historical alluvial or reef-hosted gold mineralisation with a minimum grade of 10 grams/tonne. "We will not drill out a project area when the profitable alternative is to mine," the prospectus states.

In other words, it will do what the prospectors did originally - grab all the high-grade gold that is easy to mine and then move on. Only this time they have the technology to grab a good deal more and not be defeated by such things as hitting the water table. In fact, VGM hopes to be producing gold by the first week of December at its Wedderburn operation northwest of Bendigo, with ore stockpiling already having begun.

Incidentally, the site of the Poseidon "rush" is now held by Castlemaine Goldfields (CGT), although it had been hoping to farm out the property while it concentrates on its main focus, the historic Castlemaine field. It has 574,000oz at the Chewton deposit there and, all going accord to plan, could be mining in about two years.