The Murchison goldfields could be the best place in WA to find a new gold mine
Competitive tension between major players Westgold and Ramelius puts toll treatment and takeovers on the agenda for juniors
Caprice Resources is in the sweet spot, wedged between the fiefdoms of WGX and RMS
In one of Australia's longest running gold fields, its infrastructure literally shaped by the historic mines the run like arteries through its landscape, two great fiefdoms have emerged.
To the north of the Murchison, centred around the historic gold rush towns of Cue and Meekatharra, is the territory of Westgold Resources (ASX:WGX), which mills over 200,000oz of the precious metal every year through plants at Tuckabianna, Bluebird and Fortnum.
To the south is Ramelius Resources (ASX:RMS), the king of the town of Mt Magnet, which has a similar production footprint out of its Checkers Mill and is charting a path to 500,000ozpa by incorporating Spartan Resources (ASX:SPR) and its Dalgaranga gold project.
The competitive tension is palpable, highlighted in 2023 by the battle between the warring parties for Musgrave Minerals and its Cue gold project – RMS won the bidding there. Westgold ended up merging with TSX-listed Karora to take on its Beta Hunt mine further south near Kambalda, but was at one point a suitor for Spartan forerunner Gascoyne before its fateful Never Never gold discovery.
Any player with a decent find in the district will become a takeover target for the hungry titans of the 133-year-old gold field. And new players are emerging that makes it even more exciting, especially with gold prices running above $5200/oz.
Meeka Metals (ASX:MEK) raised $60m this week for its Meekatharra gold project, where it is mulling the expansion of the project's 600,000tpa mill. Vault Minerals (ASX:VAU) is chasing life extensions for the Deflector gold and copper mine, TSX-listed Monument Mining is looking to revive the mothballed Burnakura plant and Catalyst Metals (ASX:CYL) has hit a $1.5bn valuation with its revival of the Plutonic gold mine further afield beyond Meekatharra.
For Caprice Resources (ASX:CRS) managing director Luke Cox, there's no better place to be looking for a fresh gold deposit in the context of an all-time boom for the precious metal, revealed by the WA Government to be contributing a record $739 million in royalties for the resource rich State alone in 2024-2025 and heading for higher climes of close to $1bn in each of 2026 and 2027.
Caprice's New Orient and Island gold projects sit at the nexus of the two big players, wedged literally between the domains of Westgold and Ramelius.
"You have two major players butted up against each other in the Murchison goldfields," Cox said.
"They have mills they need to feed and all of a sudden you've got the explorers, which are like the incubators for future resources within the area that will feed their mills."
Fill the mills
It's known Westgold is chasing additional feed for its processing plants, especially shallow open pit gold that can supplement the underground mines under its control like Big Bell and Great Fingall.
The $2.8bn gold miner has already inked a deal with New Murchison Gold (ASX:NMG) to process ore containing around 140,000oz over 2.5 years through its Bluebird plant near Meekatharra from the junior's Crown Prince gold deposit.
Ramelius, meanwhile, has been acquisitive in recent years, bolting on higher quality but short live resources like the Penny gold mine and Break of Day, the latter literally located next door to Caprice's ground.
CRS has a headstart on permitting. Its New Orient and Island projects sit on separate granted mining leases, removing a critical hurdle to get any gold project up and running given the time it takes to secure Aboriginal heritage clearances and State Government approval to have a mining lease granted.
Now the aim is to drill out something worthy of getting the mid-tiers intrigued.
The Vadrians Hill prospect at Island has already shown its wares – a headline strike of 28m at 6.4g/t in February proved the catalyst for the $37m capped explorer's 160% YTD share price rise.
A 7000m program recently wrapped up, with 2000m added to an initial 5000m campaign as gold continued to show. Work is also ongoing to prove up the tighter drilled New Orient, where a historic resource was once reported.
In the more than two decades since drilling has gotten denser, deeper and expanded the known strike of gold mineralisation, Cox says. At Vadrians, the aim is to outline a potential open pit with drilling continuing to find more gold.
"Initially we're looking at open pit material because that'll be the material that's of more interest to potential players in the area," he said.
"When you look at (Ramelius') Break of Day, we'll be chasing one of these to depth, either Baxter or Vadrians, North Vadrians, South Vadrians, we've just got a new discovery down here.
" There's always things that we can start to chase.
" At the moment, we're doing the shallower drilling, and then we'll start following up with deeper drilling. That's where you start getting some significant ounces."
The critical thing for companies like Ramelius and Westgold is to keep their mills fed to the optimum level. Cox, who was once mine manager at the Edna May gold mine in WA, pointed out they need to run at a critical mass or the ball mills – rotating barrels that grind down and liberate gold from mineralised ore before it is leached with cyanide – literally "eat themselves".
The steel balls which act as the grinding media can erode against each other without the right amount of ore to act as a buffer. Filling the mills isn't a luxury, it's a necessity.
Handily, work completed by previous owners has shown the ore at Island is similar to that which has been processed at Ramelius' Checkers mill for decades. Caprice will be taking its own samples for metallurgical testwork in upcoming diamond drilling.
The golden radius
Forget the golden ratio, the golden radius has become the key equation for mill operators in WA's hot gold scene.
Back in his Edna May days, Cox recalls drawing a 100km circle around the Westonia mine's processing plant. Everything inside was fair game for M&A or toll treatment deals.
With gold prices at record highs, that circle is expanding. Mines now located between 100-200km from a processing plant can be comfortably trucked and milled at a profit.
Where Caprice thinks its ground position stands out is that if the gold price were to collapse, that radius could shrink to 50km.
"If the gold price goes down to US$1500/oz, what are you going to do? If the gold price goes up to US$5000/oz, how are you going to bang for as much material as possible to make like hay while the sun shines?" Cox said.
"So you need all of these juniors to prove up resources that become potential feed sources for there mills."
For CRS, Cox said the key thing was it knows the gold is there in the ground, it just needs to do the work to prove up deposits of significance, and recently raised a cool $7m in quick time from investors to do just that.
Who else is aiming to join the Murchison empire?
There are plenty of other gold explorers looking to outline and mine resources across the historic Murchison Goldfields.
Aforementioned New Murchison Gold is an obvious one, given their processing tie-up with Westgold and denied media speculation of a takeover approach from WGX last last month. NMG is planning to develop Crown Prince at a cost of just $5.4m in the second half of this year, with its ore reserve running at 890,000t at 4.8g/t for 140,000oz.
Odyssey Gold (ASX:ODY) owns the Tuckanarra project where it boasts a significant resource of 407,000oz at 2.5g/t, as well as an access and collaboration agreement to potentially process the ore with its joint venture partner Monument Mining at the Burnakura mill. Monument is currently looking into the reopening of the plant and its expansion from 260,000tpa to 750,000tpa.
Great Boulder Resources (ASX:GBR) owns the Side Well gold project, containing over 500,000oz on Meekatharra's doorstep and is regularly touted as a potential takeover prospect for Westgold.
Further afield Strata Minerals (ASX:SMX) is looking to see if the mineralisation hosting Ramelius' ultra high grade Penny gold mine continues to the south. Initial drill results returned some low grade gold hits, but provided encouragement to plan another round of drilling.
Closer to Wiluna on the cusp of the Murchison and Northern Goldfields, Western Gold Resources (ASX:WGR) is planning FID on its Gold Duke utilising a processing deal with the operators of the Wiluna gold mine.
The site would deliver 447,000t at 2.55g/t Au for 34,000oz according to a scoping study, generating an estimated undiscounted accumulated cash surplus of $38.10 million against a capital bill of just $2.1-2.5m.
Star Minerals (ASX:SMS) is also aiming to become a small-scale gold producer at its Tumblegum South project, with India's Bain Global Resources on board as a strategic investor. With the Indian mining contractor's help it wants to bring Tumblegum South into production in early 2026.
A scoping study suggested at gold prices from A$3000 to A$3800/oz – well below current levels – the updated production target for the Tumblegum South Gold Project ranges from approximately 167,000t at 2.43g/t producing 11,800oz gold, to 255,000t at 2.16g/t producing 15,900oz gold.
That would generate an undiscounted accumulated cash surplus after payment of all working capital costs, but excluding pre-mining capital requirements, of approximately A$9.4m to A$19.6m. Tumblegum South contains a total resource of 45,000oz.
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