Pioneer of the
Australian Iron Ore

Catalyst closing in on juicy bit in hunt for new Bendigo

Article by Barry Fitzgerald courtesy of Livewire Markets.

Plus, newly-listed Maronan born with a polymetallic spoon in its mouth, Alicanto’s stunning silver-lead-zinc hit is almost 1oz-gold equivalent and Calidus set to pour first gold any minute.

Gina Rinehart is set to share in a Eureka! moment of sorts towards the back end of the year when Catalyst (CYL) releases a maiden resource estimate for its virgin Four Eagles gold discovery beneath Murray Basin sediments north of Bendigo.

It is a Eureka! moment because the hunt for new gold deposits beneath cover to the north of where the 22 million ounce Bendigo goldfield “daylighted” has been going on for more than 10 years, without a resource estimate being made by Catalyst, or anyone else.

Ms Rinehart’s involvement is through Hancock Prospecting, which is a 50% joint venture partner with Catalyst, as well as a 12.5% shareholder.

Now it has to be said the maiden estimate will be a modest one, restricted as it will be to a depth of 120m, including the 40m of cover that hid the cluster of deposits that make up Four Eagles from the oldtimers in the Victorian gold rush all those years ago.

But the expectation is that the resource will be of sufficient size to encourage Catalyst to develop an exploration tunnel to provide underground drilling platforms to test the Four Eagles deposits at greater depths, and potentially provide access for future development by linking up the deposits.

The tunnel will fix the difficulties Catalyst has had in drilling down to the 300-400m levels it wants to get to because of the sediment cover which comes with running sands and water issues. It could get deeper using a more costly diamond drilling method but even then there would be challenges in angling the holes correctly.

The upside scenario is that the deeper drilling hits the type of 500,000 ounce/40g/t shoots that made Bendigo special in its day.

There is still lots of work to do but at least it can be said that hidden gold beneath cover to the north of Bendigo is becoming a modern day mining possibility.

Most recent drilling at Four Eagles has continued to provide plenty of encouragement. At the Boyd’s Dam prospect, Catalyst recently reported grades of up to 150g/t, albeit over 1m. But there was also a long list of 6-12g/t hits over decent widths to be included in the resource estimate.

The Catalyst-Hancock partnership has also made another virgin discovery beneath cover at Boort, 100km north-west of Bendigo. Scout drilling picked up a possible 1km trend of gold mineralisation at one of four gravity targets tested with the drill bit.

Assays results from the target included 3m at 18.25g/t and 6m at 0.95g/t on two traverses 1km apart. The high-grade hit was nice but not well understood, with the real excitement coming from the fact that the low-grade hit was in basement rocks.

It is one that the joint venture will return to for sure, but not until after the Boort farmers have brought their crops in.

Catalyst last traded at $1.71 for a market cap of $170m. It wasn’t all that long ago that it traded at much higher levels on the strength of its dominant north-of-Bendigo gold hunt, buoyed as it was by Kirkland Lakes’ discovery of the super high-grade Swan Zone at its Fosterville mine, 20km east of Bendigo.

Fosterville has been around for ever but it was the Swan Zone discovery in 2016 (by following a shoot down to greater depths) that set the Victorian industry alight. While not a virgin discovery, the Swan Zone demonstrated Victoria still had major high-grade gold upside.

Catalyst’s search under cover is for the next Bendigo or Fosterville and its maiden resource estimate late this year will be an important milestone on its journey.

While it makes that journey, the company has added a gold production leg to it story by acquiring the high-grade Henty gold mine in Tassie where a major exploration program is underway to rebuild the resource base to fully utilise the existing treatment plant.

Henty has been washing its face as a small gold producer and thanks to the love it is now receiving from Catalyst, the plan is to scale up production to around 40,000 ounces annually. It will be capable of providing cash for the north-of-Bendigo gold hunt.

And given the Victorian interests alone once gave Catalyst a much higher market cap, it could be suggested that Henty’s upside comes for free in the share price.