During my visit to Warriedar this month I recorded some of the...

During my visit to Warriedar this month I recorded some of the conversations about how Warriedar is exploring the deposits at Golden Corridor. A condensed version of this discussion – with Amanda Buckingham and Thomas Dwight (exploration manager) – is below. Any questions can be directed to Amanda at the Investor Hub site.https://warriedarresources.com.au/auth/signup

Before you talk about Warriedar’s exploration effort, can you give an overview of what needs to happen for mineral deposits to form?

Mineral deposits need pathways that allow the metal-bearing fluids to get into a location. That means that we look for structures – cracks and faults in the rock – that allow the fluids to come through.

We need big scale cracks (crustal scale shears) to deliver the fluids from deep in the earth, and then smaller scale cracks (secondary structures) to focus the fluid and force a large volume of fluid through a smaller volume of rock.

At the deposit scale we need jogs, cross-faults, flexure – a disruption to the regular nature of a fault.

Another requirement is ‘traps’, or reasons for the metal to drop out of the hot fluid and accumulate in a particular spot. And there needs to be some kind of ‘seal’ as well, something that forces the metal to stay in location and not seep away.

These requirements are applicable, in a broad sense, to any style of deposit.

The main pathway or structural feature at Golden Range is the Mougooderra Shear Zone (MSZ)? How do you track something like that?

There are various ways. Magnetic data can help in the hunt for structural faults by showing areas where units of rock have moved in relation to one another. One unit might have been forced up, with the other forced down. Or they might have slid past one another. This kind of activity generates a signature, or magnetic response, that shows up in the data, which allows us to draw conceptual boxes around the areas that look more interesting in exploration terms than others.

The contrasts between magnetic responses often show up in surveys, appearing like lines that we can draw onto a map. Structural understanding like this is very, very important, as fluids will always travel along paths of least resistance.

Of course, we don’t always get a clear picture from magnetic data so we employ other techniques, like gravity surveys, to identify structure as well.

We have deployed multiple datasets to map the MSZ. We haven’t just relied on geophysics either, using aircore results from previous drill campaigns to see where we get pathfinder elements including arsenic, tungsten, bismuth, moly, silver and tellurium. You need geochemistry at the deposit scale.

How has your understanding of the MSZ improved?

(TD) The MSZ is more than 70 kilometres long across our tenement package, so there is variability in the mineralisation along its length. There is gold mineralisation throughout but in some areas we also see more antimony, in others there is silver, in others there is low-level copper-lead.

Gold deposits are often found at cross-structures that intersect longer, more regional faults at oblique angles. These cross-structures force the main shear to open up, allowing space for gold fluids to come in. The cross-structures at the MSZ have been created by a series of deformational events over millions of years. We have been mapping them along the main shear zone as a way of targeting the potential gold.

Think of them like cracks in the rock, which serve as highways for mineralization. The fluids start to move around at depth and they use the cracks to travel. In the right conditions in terms of temperature, pressure and geochemistry, the mineralization then drops out at certain points.

For example, Windinne Well in the Golden Corridor is characterized as a BIF (banded iron formation) deposit. Here the fluids have travelled through cracks in the rock until they hit areas of iron-rich material. Put simply, the gold then latches onto the iron. And these are the areas where we are finding high-grade gold.

So the exploration effort is focusing on cross-structures along the MSZ? Can you give a summary of your main targets?

Our current focus is on an area of the MSZ called the Golden Corridor, which is a stretch of Golden Range, the fuller area under Warriedar’s ownership (Golden Range = the whole project, Golden Corridor = our current focus area within Golden Range).

In the Golden Corridor, we really like the M1 deposit, which looks a bit like a tongue in 3D imaging. It has been mined in the past for gold and silver, and it’s right next to the processing plant.

The deposit is open, with pretty good average grade of about 2.9g/tonne. We drilled one diamond hole into M1 last year and got 9 metres at 9 grams a tonne, which we hadn’t really expected. So we think parts of the resource could be higher grade, although we need to understand more about what’s happening at depth and along strike.

We drilled RC collars there last month and a diamond rig has been working there over the last week. There’s very good potential for growth at M1.

Next is Windinne Well, which is on a parallel splay off the main MSZ, about 5 kilometres from the processing plant. Windinne Well is a favourite because it’s a BIF (banded iron formation) deposit, which are deposits that are generally easier to process. The ore there is free-milling. By that, I mean we can send it through a standard processing plant without too much difficulty (for example, our own plant). The fact that this deposit is on a parallel splay is quite exciting because it shows that all the parallel splays in the project area are potentially mineralised.

Windinne Well offers a similar average gold grade to M1 but it also has an absolutely lovely high-grade shoot below the pit, where some of the gold hits get up to 22g/t.

One of the diamond rigs is drilling there now and we have also drilled a few holes in the southern part of Windinne Well so that we can understand more about the rock unit there. Ideally, we would like to find repeats of the Windinne Well deposit along the 4km BIF unit.

Then we get to Ricciardo, the jewel in the crown. We think this deposit will end up being quite a lot larger, with different domains. We’ve identified three domains so far – gold, antimony and gold-antimony.

There are all sorts of pathways for processing the resource at Ricciardo. But at the moment we need to focus on drilling, so that’s what we are doing. Ricciardo also has two high-grade shoots that we will be drilling under and around.

I think we are only starting to see what Ricciardo is capable of in terms of growth and depth potential.

If we go south of Ricciardo we start to encounter smaller deposits that also have plenty of potential but that we need to understand better. They sit in the same rock and show similar structure, including an area called Azure Coast, which has four or five historical pits. The situation there is similar to Ricciardo – the pits were previously mined for the oxide and there’s not much understanding of the fresh rock beneath.

I mean, when you look at these southern deposits there’s been very little drilling at all below 170 metres. Not a single hole has gone into the fresh rock at depth, it’s a complete unknown.

Another deposit called Bugeye, which sits in the Golden Corridor a bit further south from Azure Coast, is in the same category of being significantly under-explored.

Please talk about the high-grade shoots at Ricciardo. There’s one shoot in an area called Ardmore, for instance?

(TD) Ardmore is really interesting. Initially it seems like a fairly straightforward deposit, dipping west about 60 degrees. Then the orientation of the shear suddenly changes, dipping much more steeply and growing in width from something like 15 metres to 70 metres. But it’s not as simple as just following the shear deeper. There are at least five different shoots and mineralized pods, so tracking and modelling each of them is keeping us on our toes.

These more complex areas are often the parts of mineral deposits where we hope to find better mineralization, because they are structurally complicated. The more complex the area, the better the chance of encountering the mix of geological ingredients that encouraged the gold to drop out of solution and preserve it in place.

Another point to make is that is that we are constantly learning more about the deposit and that it only takes a single drill hole to change our ideas of what might be going on. At Ricciardo, for instance, there are 3 or 4 mineralising events that we know about for the gold and antimony resource. But we drilled a hole recently which suggested there may be a later event. We don’t know yet, but we will find out.

You mentioned antimony at Ricciardo. You found60,000 tonnes of it, which is equivalent to about 900,000 ounces of gold, without drilling a single hole?

Yes, it was a really cost-effective programme. We saved millions of dollars on drill costs.

When we realised last year that there was an opportunity to find antimony at Ricciardo, we sent about 3,300 historical pulps to be re-assayed. These were samples that had been tested for gold by the previous owners. When the assay labs finish their work, they send you back the leftover material, called pulps. We had loads of these pulps in storage containers and we did a lot of work to categorise and prioritise them for re-assay. We used the results of this programme to support the maiden resource estimate for antimony at Ricciardo, which we were really pleased with.

Are there any more pulps that are going to be assayed for antimony?

(TD) There are a few at Ricciardo but we aren’t analysing many more because we feel we’ve done as much work as we can with them. It’s the law of diminishing returns. Our efforts are better spent elsewhere: the main task ahead is drilling new holes in zones where we now understand much better where the antimony could be.

However, we do have some historical diamond holes from another high-grade shoot at Silverstone in Ricciardo and the core is being sent to the lab. This old core was never tested for antimony, so we are checking it ourselves. We have also sent 1,000 pulps from Azure Coast, where we had an excellent antimony drill hit last year (over 2%), to the labs. We don’t really know what to expect from them but the results should become available pretty soon.

Warriedar’s discovery cost has been reported at $16 an ounce, which is competitive. If we factor in how cheaply you found the antimony resource it would be even lower?

(TD) Our discovery cost for the gold resource is pretty competitive, although it’s fair to say that we have benefited from some of the work completed by Minjar [the previous owner of Golden Range]. Their exploration team did a lot of drilling that has helped our own programme, including deeper holes, but they weren’t really focusing on the hard rock deeper beneath the pits. My guess is that their geologists knew there was more to find in the fresh rock but the corporate priority was to target the oxide ore, so they could feed their mill.

Fortunately, we are not constrained in how we explore at Golden Corridor in the same way. Our focus is to find large gold deposits, not feed a hungry mill with soft ore.

Will most of the exploration dollars be spent at Ricciardo over the next few months? What are your hopes for growing the resource there?

We’re planning to drill about 30,000 metres this year at Ricciardo. On top of that, about 15% of the total metres will be drilled at greenfield targets elsewhere in Golden Range. But the large majority will be drilled at Golden Corridor, with Ricciardo getting most of the attention.

In terms of current discovery costs, we are calculating we need between $8m and $10m of direct drilling expense at Ricciardo to grow it to 3 million Aueq ounces, for instance. That implies increasing the gold resource there from 1 million to 1.5 million ounces, as well as an increase from 60,000 to 90,000 of contained tonnes of antimony.

(TD) It’s a little more complicated because we’re not only trying to grow the resource, we also need to improve it. We have to drill some of those metres to get more of the ounces into the indicated and measured categories. But I still think there is a lot of room for the resource to increase in size, particularly in the higher-grade shoots, which haven’t been well-defined in previous drilling. The high-grade at Ardmore is a particular target and we are going to be drilling it aggressively this year.

I think the company is in such a strong position now, with the team that we have and the growth trajectory ahead. We’re funded, we’ve got great targets and we’ve got the rigs to test them. It’s going to be an exciting six months.