Australia's new gold rush lures prospectors Down Under (updated)

Novo Resources

30/11/2017 07:42

* Canada's Kirkland Lake Gold lists on ASX 
    * Sees growth in far west Australia 
    * Gold rush underway 
 
 (Adds Kirkland ceo, analyst comments) 
    By James Regan 
    SYDNEY, Nov 30 (Reuters) - Canada-based Kirkland Lake Gold 
 KL.TO  listed its shares on the Australia bourse on Thursday 
after investing millions of dollars and joining dozens of other 
prospectors in a modern-day gold rush. 
    Kirkland Lake expects to produce a quarter-million ounces of 
gold in 2017 from a mine it bought a year ago in eastern 
Australia and is also dipping a toe into a tantalizing new gold 
region on the other side of the continent. 
    More than 25 publicly-listed companies and legions of small 
prospectors are exploring for gold on the western fringe of 
Australia in an area known as the Pilbara, better regarded for 
iron ore. 
    The target is gold occurring in clusters of pebbles and 
which investors such as Kirkland are betting will compare in 
size with South Africa's massive Witwatersrand Basin, where more 
than a third of the world's gold has been mined. 
    "It's an exploration story right now," Kirkland Chief 
Executive Tony Makuch told Reuters. 
    "But I've been there and picked up pieces of gold myself," 
he said. "We've just got to figure out how big it is and how 
much it's worth."  
    People have made fortunes mining iron ore in the Pilbara, 
including Gina Rinehart, the world's richest woman, according to 
Forbes. But until now no-one's much looked for gold. 
    However, in the past year a record 1,896 gold prospecting 
licenses were granted by the Western Australia Department of 
Mines, many for individual prospectors known as "detectorists" 
trying their luck. 
    "The Pilbara will be the next big thing or we'll be looking 
back in 12 months saying, 'oh, that was interesting and that's 
all'," said Joe Treacy, managing director of explorer Marindi 
Metals  MZN.AX . 
    This month, Marindi found 63 separate pieces of gold, the 
biggest a 6mm nugget (1/4 inch), sending its stock up 42 
percent.     
    The excitement stems from the discovery of gold in July by 
another Canadian company, Novo Resources  NVO.V , at the 
Purdey's Reward prospect with joint venture partner Artemis 
Resources  ARV.AX . 
    Novo's samplings uncovered watermelon seed-shaped nuggets. 
    Then in September De Grey Mining  DEG.AX  discovered more 
nuggets at a spot named Louden's Patch, 100 kms (62 miles) to 
the east of Purdey's Reward.  
    Novo shares have leapt more than six-fold since January, 
while De Grey's shares are up nearly five-fold. 
    A month ago, Kirkland Lake's chairman, Canadian billionaire 
Eric Sprott, invested A$5 million ($3.8 million) through Sprott 
Capital Partners in Kairos Minerals  KAI.AX , another explorer 
in the region. 
    Kirkland Lake already holds 18.2 percent of Novo via a A$56 
million investment, and earlier this month subscribed to A$5 
million of De Grey Mining shares, pending shareholder approval.  
    Out in the Pilbara, prospecting is proving particularly 
popular among so-called "grey nomads," retirees with a bent for 
traveling around the country in caravans and motor homes. 
    It took retired carpenter Pete Caudwell just three days to 
find two dozen gold nuggets - almost enough to pay for his 
A$6,000 metal detector. 
    With overhead costs now covered, Caudwell, who still speaks 
with a thick British accent half a century after migrating to 
Australia from Nottinghamshire, is looking to turn a profit.  
    "I'll be back again after the summer passes to try my luck 
again," Caudwell said. "It's too hot to prospect on my own there 
now." 
    But for mining companies it could take years to determine if 
enough gold exists to start mining on a commercial scale. 
    "It is very early days and despite the publicity, there is a 
great difference between an exploration play and a successful 
mining venture," said Sandra Close, a director of gold 
consultancy Surbiton Associates. "Exploration is a risky and 
expensive business." 
    $1 = 1.3177 Australian dollars) 
 
 (Reporting by James Regan; editing by Richard Pullin) 
 ((jim.regan@thomsonreuters.com; +612 9373-1814; Reuters 
Messaging: jim.regan.reuters.com@reuters.net)) 
 
Keywords: AUSTRALIA GOLD/KIRKLANDLAKE