Barry FitzGerald: This explorer is chasing Fosterville 2.0, and he has runs on the board

Ian Holland played an instrumental role in Australia’s best 21st century gold discovery. Now he wants to repeat the feat at an ASX small cap.

Fosterville's Swan Zone was the crown jewel of Australia's gold scene. Can this explorer find another? Pic: Supplied/Stockhead

“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

Veteran geologist Ian Holland is on a mission to find the next Fosterville.

Fosterville near Bendigo in Victoria became the most profitable gold mine in the world for its Canadian owner Kirkland Lake after the discovery of the ultra-high-grade Swan Zone in 2016.

The Swan Zone was a zone of quartz spotted with visible gold (and antimony) that hosted more than 2 million ounces, carrying grades of up to two ounces a tonne – unheard of in this era. It was magical stuff while it lasted.

Fosterville went from a scrappy gold producer to a fantastically profitable 500,000oz a year producer at its peak thanks to the Swan Zone. The mine (now owned by Canada’s Agnico Eagle) is still the biggest gold mine in Victoria but production levels are at much more sedate levels pending the discovery of another ultra-high-grade zone.

Holland was intimately involved with Fosterville and the Swan Zone discovery. He started work at the project in 2007 as production and geology manager with then owner Perseverance.

Five Canadian owners followed by the time Holland moved on in 2020, during which time the former North Queenslander had stints as Fosterville’s general manager and, later, vice president of Kirkland Lake Australia.

Having seen Fosterville/Swan Zone up close, Holland’s mission to find another one is perfectly understandable.

His vehicle of choice is the formerly sleepy Adelong Gold (ASX:ADG) currently trading at 0.5c for a market cap of $11.24 million. Holland became managing director of Adelong last year and has been busy recasting it as a Victorian-high-grade gold and antimony explorer.

But wait there is more

The company also has a 49% share of gold production from its namesake mine in southern NSW, about 80km from Gundagai.

Holland last year got ASX-listed Great Divide Mining (ASX:GDM), trading at 42c for a $14m market cap, to pick up the running at the project as a derisking exercise, and to focus Adelong’s attention on the Victorian hunt.

The operation at the historic site produced first gold under GDM’s tutelage last week.

Using refurbished equipment from a previous operation, the simple gravity recovery plant is processing remnant ore and tailings. The next step is to move into commercial mining and production.

No timetable on that just yet but it is being worked on by the can-do GDM team. A 2022 scoping study pointed to the potential for a 20,000oz a year “stage one” commercial operation to yield $69 million in net cash at an assumed Aussie gold price of $2650/oz.

And here we are in a $5200/oz gold price environment. So the mine could be a nice earner for both GDM and Adelong in time. And there is also plenty of exploration upside at depth at the project and in the surrounding tenements.

Fosterville 2.0

Now back to Holland’s ambition to find the next Fosterville.

In May, Adelong struck a low-cost shares and cash deal with the Toronto-listed and now PNG focussed Great Pacific Gold Corp to acquire its Fosterville South project, since renamed by Adelong to the Lauriston project.

As the original name suggests, the project area is immediately south of Fosterville.

Nearology only goes so far in the exploration game. But it can be said the Lauriston project is along strike from Fostervillle and shares key structural, geological and mineralisation features with Fosterville.

Lauriston is near the Calder Hwy town of Kyneton 87km north-west of Melbourne, a region known for the producing Costerfield gold-antimony mine which is to become part of Alkane (ASX:ALK) following its merger with Canada’s Mandalay, and the Sunday Creek gold-antimony discovery by boom stock Southern Cross Gold (ASX:SX2).

Great Pacific – which now owns 7% of Adelong – notched up a high-grade discovery at Lauriston in 2023 at the Comet prospect, highlighted by an 8m hit from 95m grading 104g/t, including 2m grading a stonking 413g/t (13.27 ounces).

Because it was owned at the time by a Canadian company, the discovery flew under the radar. And then Great Pacific switched focus to PNG.

Holland expects to roll a drill rig up to Lauriston in October. Apart from the potential for more high-grade gold hits, Adelong will be assaying the holes for antimony after coming across the critical metal in re-assayed Great Pacific holes.

Also worth looking out for is pending assay results from a recent drill program at the Apollo gold/antimony project, 120km north-west of Melbourne and at the northern end of the Walhalla gold belt. It is another former Great Pacific project picked up by Holland.

Drilling in 2022 returned some exceptional mixed grades, including 3m at 5.2g/t gold and 3.4% antimony. As mentioned, results are pending.

The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

Originally published as Barry FitzGerald: This explorer is chasing Fosterville 2.0, and he has runs on the board