Western Australia’s Murchison region has a long history of gold mining, into which Musgrave Minerals (ASX:MGV) is seeking to write its own memorable chapter.
Gold was first discovered in the Murchison in 1891, when an Aboriginal prospector by the name of “Governor” found a 10-ounce nugget at Cuddingwarra about 14 kilometres west of the present-day township of Cue.
Encouraged by Governor’s find, Michael Fitzgerald and Ned Heffermen went on to make their own discovery shortly after on New Year’s Day, 1982, at Kintore Blow, which yielded 260 ounces within the first week.
Later in 1982, the Day Dawn reef was discovered about 8 kilometres southwest of Cue. Day Dawn – or Great Fingall, as it is sometimes known – developed into one of Western Australia’s largest and most profitable gold mines in the early 1900s.
Since those times, there have been several other significant discoveries in the Murchison that have supported major mining operations, such as Hill 50 and Big Bell, and the prospectivity of the region remains undisputed.
These days, the main companies mining gold in the Murchison are Westgold Resources (ASX: WGX) and Ramelius Resources (ASX: RMS), both of which have market capitalisations in excess of $300 million.
Westgold produced 163,166 ounces from its Central Murchison Gold Operations in financial year 2018, while Ramelius produced 137,597 ounces from its Mt Magnet operations in the Murchison over the same period.
Musgrave’s Cue Project sits neatly between Westgold’s Tuckabianna mill to the north and Ramelius’ Checkers mill to the south, and is within trucking distance of three other mills: Westgold’s Bluebird, Gascoyne Resources’ Dalgaranga, and Andy Well, which Doray Minerals is in the process of selling to Galane Australia Pty Ltd.
In July 2018, Musgrave signed a non-binding term sheet with Westgold outlining a mine management and profit sharing agreement that could lead to the development of the existing high-grade gold resource which Musgrave has defined at Cue.
Predominantly contained within two deposits, Break of Day and Lena, the Cue resource stands at 4.83 million tonnes grading 2.84 grams of gold per tonne for 441,000 ounces of gold.
While best efforts continue towards finalising the term sheet, Musgrave is spoiled for choice when it comes to the processing options in the region.
Ultimately, it may even make more sense to pursue production under its own steam, particularly if its exploration efforts under the salt lake system at Cue, an area never previously explored, continue to be successful.
Lake Austin North, the first of several priority targets on the lake system to be tested by the company, is showing early signs of developing into a large gold system, with several impressive intercepts returned in RC and diamond drilling.
Musgrave managing director Rob Waugh said the company was looking for multi-million ounce deposits on the lake and that testing Lake Austin North was just the first step.
A discovery in the million ounce-plus range would comfortably support a stand-alone mining operation and add to the Murchison’s grand, golden history.
This content is produced by Star Investing in commercial partnership with Musgrave Minerals. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Don’t miss a thing, subscribe now