Redcastle Resources increases resources at Leonora region gold deposits to 42,000oz

Redcastle Resources is on its way to becoming an integrated exploration and production company after lifting resources to 42,000oz at the Redcastle project.

The Redcastle project is about 58km southeast of the Gwalia gold mine in the Leonora-Laverton portion of WA’s eastern Yilgarn. Pic: Getty Images

Special Report: With a 280% resource boost to 42,000oz, Redcastle Resources is on the fast-track to unlocking the true potential of its Eastern Goldfields assets.

• Redcastle Resources upgrades Queen Alexandra and Redcastle Reef resources by 280% to 42,000oz
• Majority of indicated resources located in conceptual open-pit shells
• A scoping study is underway with initial results expected in July 

While any resource upgrade is significant, what takes the cake here as that most of the indicated resource – totalling 25,000oz – is located in the conceptual open pit shells of both the Queen Alexandra and Redcastle Reef deposits.

This is significant as it means that the resources with the greatest certainty are all located near surface at the two deposits, which provides the basis for scalable production.

It also plays well into Redcastle's non-binding memorandum of understanding with contract miner Terra Mining, which will fund and manage mining works at the two deposits under an open-book, performance based profit-sharing alliance.

Along with the expected completion of a scoping study at the end of July, this will provide the foundation for the company to become a near-term gold producer by leveraging the district’s third-party tolling potential to develop the two deposits.

Upgraded resource

This upgraded resource estimate, which includes a maiden resource for Redcastle Reef, includes results from reverse circulation drilling earlier this year.

A total of 234 drill holes were used in the resource update incorporating five diamond holes and 229 RC holes along with data from 20 historical RC holes. 

Combined, the total resource for these deposits stands at 488,000t at 2.7g/t gold for 42,000oz, comprising indicated resources of 313,000t at 2.4g/t for 25,000oz and inferred resources of 176,000t at 3g/t for 17,000oz. 

The two deposits are just 700m apart, representing an opportunity for co-development and cost synergies through shared infrastructure.

The orebodies remain open in multiple directions, with inferred resources beneath the Queen Alexandra and Redcastle Reef conceptual open pits defined using economic cut-off grades of 2g/t and 1g/t, indicating potential for further resource expansion.

Recent drilling at Queen Alexandra highlighted the high-grade and shallow nature of the mineralisation there with intersections of 4m at 10.94g/t gold from just 6m of depth and 4m at 4.79g/t from 8m. 

Redcastle shows grade potential

Highlighting that grade is still king, the shallow ore from 6m promises early production at +10g/t, which will return strong initial economics. 

Redcastle Resources (ASX:RC1) chairman Dr Ray Shaw said the upgraded resources bolstered the company’s aspiration to become an integrated explorer and producer, with both near-term production and an expanded land position. 

“The indicated resources being located within conceptual open pit shells provide sound technical and economic foundations for near-term development and validated the company’s strategy of partnering with Terra Mining,” he said. 

Redcastle locked in an MoU with Terra Mining, a leading mining services provider, earlier this month to fund and manage mining at Queen Alexandra and Redcastle Reef. 

Plans include a shallow open pit for initial gold extraction, with Terra Mining to handle the drilling and blasting, loading and hauling, pit dewatering and ore stockpiling required.

Shaw said the close proximity of Queen Alexandra and Redcastle Reef underpinned the company’s anticipation of a future co-development model, with its potential attendant unit cost savings. 

“Shareholders can be assured that in actioning this expedited production strategy, your board will remain committed to minimising near-term capital requirements, while preserving long-term growth flexibility and value creation,” he added.

An independent scoping study at Queen Alexandra including the evaluation of starter open pits to access shallow high-grade ore is in progress, with initial results expected by the end of July. 

This article was developed in collaboration with Redcastle 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.