Astral boosts gold inventory to 1.76Moz on Spargoville inclusion

Astral Resources updates its Spargoville resource to 3Mt at 1.4g/t gold for 139,000oz following the acquisition of Maximus Resources.

Astral considered it essential to establish its own baseline resource estimate for the recently acquired Spargoville gold project in WA. Pic: Getty Images

• Astral updates Spargoville resource to 3Mt at 1.4g/t gold for 139,000oz

• It represents a decrease in contained metal compared to the MREs of previous owner MXR

• Drilling is set to begin this quarter on new Spargoville tenure adjacent to the Hestia deposit at Mandilla

Special report: Astral Resources has boosted its gold inventory to 1.76Moz after an update to the resource for the Spargoville project, which came with the Maximus Resources acquisition.

The same revenue and cost assumptions used in the Mandilla resource estimate were applied to Spargoville.

Cost assumptions underpinning the optimisation are based on the mining and processing unit costs in the upcoming Mandilla gold project PFS, due to be finalised in the June 2025 quarter.

A 0.39 g/t gold cut-off was applied, which is constrained within pit shells based on a gold price assumption of A$3,500/oz.

With the inclusion of the Feysville (5Mt at 1.2g/t for 196,000oz of contained gold) and Mandilla (42Mt at 1.1g/t for 1.43Moz) resources, the group’s total consolidated resource now amounts to 50Mt at 1.1g/t gold for 1.76Moz.

Gold merger

Astral Resources (ASX:AAR) and Maximus Resources (ASX:MXR) agreed to merge back in February to become a leading WA gold developer.

The offer, which valued MXR at roughly $31m, included the consolidation of AAR’s flagship Mandilla project, adjacent to MXR’s Spargoville project in WA’s Goldfields.

With the compulsory acquisition of outstanding shares in MXR now complete, AAR managing director Marc Ducler said it was important for the company to set its own baseline for the recently acquired resources at Spargoville.

The recalculated resource for Spargoville (3Mt at 1.4 g/t gold for 139,000oz of contained gold) represents a decrease in contained metal compared to previous MREs announced by MXR of 6.9Mt at 1.5g/t for 335,000oz.

AAR’s approach to testing the resource

“Astral’s standard approach when testing the mineral resource for reasonable prospects for economic extraction (RPEE) includes a first step of regularising the block model, which is the process of varying the size of the block model shapes to approximate the size of the earthmoving machinery likely to be used in open pit mining,” he said.

“Today’s update reflects this process of regularisation as well as the application of the latest revenue and cost data for the pit optimisations derived from contractor quotes obtained for the upcoming Mandilla PFS.

“The downward revision in contained metal is mostly attributable to the impact of dilution resulting from increasing the block dimensions to 4mE x 5mN x 5mRL and application of the Astral economic constraints.”

Ducler said due diligence in the lead-up to the Maximus transaction involved an independent fatal flaws review of the mineralisation block models at Spargoville and an internal review of the economic assumptions and open pit optimisations to satisfy the RPEE aspects of the JORC 2012 code.

“The due diligence identified that further technical work would be required on the then current Maximus MRE as reported to align it with Astral’s approach when reporting mineral resources,” he said.

Importance of MXR transaction

“The fact that the work since undertaken by Astral has resulted in a reduction in the number of contained ounces of gold was anticipated by our team and was taken into account in determining an appropriate offer price,” Ducler added.

“The Maximus transaction was very important for Astral.

“Not only has it contributed a further 139koz of contained gold, increasing the group MRE to a very healthy 1.76Moz, it also provides the company with the necessary tenure footprint to develop the Theia deposit to its fullest potential as well as optimise the proposed site infrastructure layout – which were key drivers of the transaction.”

Drilling to get underway on new tenure

Ducler said the transaction also provided the company with additional highly prospective tenure adjacent to the Mandilla project, which has already delivered 1.43 million ounces of gold discoveries at an average cost less than $18 per ounce.

“The new tenure includes previously untested areas immediately south of, and along strike from, the Hestia Deposit, where 2.4 Mt at 1.2 g/t for 91koz of contained gold are currently estimated,” he said.

“Astral considers the entirety of the new Maximums tenure to be highly prospective and is looking forward to completing our own targeting of the area prior to commencing future brownfields and greenfields exploration campaigns.”

Drilling is expected to begin on the new Spargoville tenure immediately south and north of the Hestia deposit at Mandilla in the current quarter.

A more substantial RC drill program is also under consideration for the September quarter 2025.

This article was developed in collaboration with Astral Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Astral boosts gold inventory to 1.76Moz on Spargoville inclusion