Kristie Batten: Could this be the most undervalued gold project in WA?
One of Australia's top mining journalists, Kristie Batten writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.
Gold explorer Norwest Minerals (ASX:NWM) has been flying under the radar but that might be about to change after a couple big weeks for the company.
The company has been reasonably low key, but the stars appear to be aligning, which should result in an increase in news flow in the coming months.
Norwest owns the Bulgera gold project in Western Australia's Mid West region, situated on the same greenstone belt that hosts Catalyst Metals' (ASX:CYL) producing Plutonic gold mine about 40km away.
The company picked Bulgera up in 2019 for about $230,000 and Norwest CEO Charles Schaus believes it is the most undervalued gold project in WA.
Bulgera has a resource of 6.3 million tonnes at 1.07 grams per tonne gold for 217,600 ounces.
At a gold price of $5000 an ounce, that equates to more than $1 billion of gold in the ground – a tantalising prospect for a company with a market capitalisation of just $8.8 million as of Friday's close.
When Catalyst started consolidating the Marymia belt around Plutonic, Norwest decided to apply for a mining lease for Bulgera.
After a two-year wait, that mining lease was granted last month.
'It's a huge step toward production, because you can't move a tonne unless you have a mining lease,' Schaus told Stockhead.
Fresh eyes
Norwest hasn't drilled a hole at Bulgera since 2021 and last completed a pit optimisation in 2022 when the gold price was around $2500/oz.
'When we modelled that mineralisation back in early 2022, there was a lot of what we call mineralised waste sitting between surface and 20m, and the model didn't capture that because it was considered waste,' Schaus said.
'Fast forward to 2025 and the gold price has doubled – all of that mineralisation is now economic.'
Last week, Norwest started the process of remodelling the mineralisation.
'We're going to see this big increase in near-surface tonnage,' Schaus said.
'We should run pit designs now at $4000 or $4500 and that is going to drive those pits deeper, but it's also going to grab all that new mineralisation sitting at the surface.'
Bulgera also hosts a 2.2Mt stockpile dating back to 2004, when the project was last mined.
Norwest believes the stockpile grades around 0.25-0.5g/t gold.
'From the late 1990s to 2004 there was about 440,000 tonnes of easy-to-grab higher-grade oxide taken from the Bulgera area and trucked down to the Plutonic mine to blend with their hard underground material,' Schaus said.
'In 2004, a tonne of material going at 1 gram was only worth $16. Now, a tonne going at 1 gram is worth $160.
'That 2.2 million tonnes of waste, at $160 a gram, one tonne of that may be worth $80 and you don't have to mine it, so we have that just sitting there.'
Norwest plans to weigh up processing options. While Plutonic is the obvious home for any ore from Bulgera, the high gold price means it can be trucked further.
Funded for drilling
Last week, Norwest launched a one-for-one non-renounceable entitlement offer to raise $4.85 million at 1c per share.
Major shareholders Chaleyer Holdings and Fortress Minerals are underwriting the offer to $3m, while directors and major shareholders have committed to take up their full allocations totalling $1.62m.
Schaus said the cash would allow the company to have a real crack at Bulgera in what will be the first meaningful work on the ground in years.
'While we're doing the work and announcing the new model and the new pit designs, we'll also take that $4.85m and start drilling,' he said.
'We'll be drilling near the surface to bring the inferred to indicated, bring the indicated to measured, but also, sitting below that big oxide zone are six lodes.
'Basically, the weathering of these lodes has come together, made this big oxide area, and then below we have these lodes that basically extend down below.
'We've only drilled one of the lodes, which we coincidentally called the Bulgera lode, and we drilled that down to 550m back in 2021.
'It's a shear zone. It kept going – and that holds 89,000 ounces by itself, so we've still got another five to test.'
The company has all approvals in place to drill and will kick off the program shortly.
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"Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said. ON THE ASX: * The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4 * The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6 CURRENCY SNAPSHOT: One Australian dollar buys: * 64.76 US cents, from 64.96 US cents on Thursday at 5pm * 92.99 Japanese yen, from 93.39 Japanese yen * 56.10 Euro cents, from 56.39 Euro cents * 47.83 British pence, from 47.89 pence * 107.67 NZ cents, from 107.80 NZ cents Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment. The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6. Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks. The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent. Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks. Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm. The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said. "You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP. 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The sector is roughly flat for the week. Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices. Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high. Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety. The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm. Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East. "Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said. ON THE ASX: * The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4 * The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6 CURRENCY SNAPSHOT: One Australian dollar buys: * 64.76 US cents, from 64.96 US cents on Thursday at 5pm * 92.99 Japanese yen, from 93.39 Japanese yen * 56.10 Euro cents, from 56.39 Euro cents * 47.83 British pence, from 47.89 pence * 107.67 NZ cents, from 107.80 NZ cents Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment. The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6. 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Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth. "In the worst-case scenario, then potentially we see crude oil spike up towards $US100 (a barrel) and that takes inflation significantly higher," Mr Sycamore said. "That reduces the ability of central banks around the world to ease interest rates, because they're then fighting another re-acceleration in inflation." Energy stocks and utilities both surged more than four per cent, and the defensive consumer discretionary sector was the only other division in the green, up 0.25 per cent. The spike in crude prices was good news for Woodside investors, as the oil and gas giant rallied more than seven per cent to $25.21, the top-200's best performer. Financial stocks, which account for roughly half of the top-200's value, fell 0.4 per cent as three of the big four banks - excepting a flat Westpac - grinded lower. The sector is roughly flat for the week. Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices. Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high. Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety. The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm. Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East. "Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said. ON THE ASX: * The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4 * The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6 CURRENCY SNAPSHOT: One Australian dollar buys: * 64.76 US cents, from 64.96 US cents on Thursday at 5pm * 92.99 Japanese yen, from 93.39 Japanese yen * 56.10 Euro cents, from 56.39 Euro cents * 47.83 British pence, from 47.89 pence * 107.67 NZ cents, from 107.80 NZ cents
