Resources Top 5: Will there be a day when gold DOESN’T send ASX stocks crazy this week?!

WA gold stocks led the gains on the ASX, with Western Gold Resources, Labyrinth and Great Boulder all among the winners.

Pic: Getty Images.

• Western Gold rises on a mind-boggling 617% IRR for developing Gold Duke

• Great Boulder intersects multiple high grades of gold at grades up to an eye-whopping 194.5g/t

• Labyrinth up again after Vivien acquisition, high powered board changes

Here are the biggest small cap resources winners in morning trade, Wednesday, September 25. Prices accurate at time of writing.

Western Gold Resources (ASX:WGR)

WGR saw a flurry of interest after loading up a scoping study that put a ridonculous 617% internal rate of return on the development of its Gold Duke project in the north-eastern Goldfields of WA.

Leveraging just a fraction of the 234,000oz resource at the project, the vitals are thus:

At a gold price of $3500/oz (a touch shy of current Aussie dollar levels), the project would produce 34,000oz, milling 447,000t at a grade of 2.55g/t through a third-party mill in the region.

That would deliver some $38.1m in undiscounted cash surplus on a pre-mining establishment cost of only $2.1-2.5m, with a total funding requirement of $6-7.2m over a 12-month, multi-pit mine life.

Gold Duke sits in the Wiluna West project, not far from the mothballed Wiluna gold project, where a PFS in early 2024 looked at a potential restart. Other mills surround the asset to the south.

These sorts of sugar-hit projects can drop a bit of cash in the pocket, utilising spare capacity at processing facilities nearby to avoid the pain and cost of building a mill of your own.

Whether that cash gets returned to investors, spent on drilling to find a true standalone project or to look for another similar asset to keep the treadmill running is a question for the future.

We’ve seen a few companies use the JV or contractor-funded model to get projects like this off the ground, notably Brightstar Resources (ASX:BTR) at its recent Selkirk JV.

WGR MD Warren Thorne said the explorer was now looking at the best options to commercialise the mine.

“The Scoping Study has demonstrated the attractive value and potential cash generation of the Gold Duke project over a broad range of gold prices. Importantly there is significant further upside as the study only includes 51% of the published resource of the Project,” Thorne says.

“The mine development has been optimised to minimise up-front capital costs, utilising operational cash flow to self-fund mining generating open pit ore feed to nearby processing facilities.

“The mine plan has been designed to minimise risks associated with ramp up and deliver a profitable gold producer in WA with significant upside to expand on the production profile and mine life.

“WGR can now take the next steps to assessing its various alternatives over which may include third-party toll treatment, sale, or joint venture to advance the project to commercialisation.

“In parallel with our efforts to bring the Gold Duke project into production, we continue to advance exploration efforts across the Project with the intent of finding additional ounces to add to the mine plan. We look forward to continuing our dual focus of development and exploration in the Goldfields and building WA’s next meaningful gold producer.”

Around 60-65% of the production target at Gold Duke sits in measured and indicated ounces, with 35-40% to come from inferred ounces, which have a lower confidence level.

Over $1m-worth of shares have been traded since open and the now $6.3m market-capped gold hunter is up 27.6% to swap for 3.7c at time of writing.

Great Boulder Resources (ASX:GBR)

Ahead of a pivotal resource update of its 668,000oz Side Well gold project near Meekatharra in WA, infill and extensional drilling has cropped up massive gold hits of up to 194.5g/t.

It's not just a one off, as huge gold grades have been found all around the 6.5Mt at 2.7g/t Mulga Bill deposit at the project, with the latest round of assays showing:

• 5m @ 43.13/t Au from 185m, including 2m @ 102.80/t Au from 186m in 24MBRC028
• 5m @ 40.61g/t Au from 256m, including 1m @ 194.50g/t Au from 258m in 24MBRC03
• 6m @ 20.52g/t Au from 179m, including 2m @ 57.10g/t Au from 179m in 24MBRC027
• 5m @ 16.93g/t Au from 91m, including 2m @ 39.70g/t Au from 92m in 24MBRC0

The ressie's excitement for the bonanza grades has it imminently spinning the drillbit for maiden RC drilling of its high-priority Side Well South prospect.

“These are sensational new intersections at Mulga Bill. The holes were designed to add definition within areas of inferred resource and they have done so in emphatic style, with intersections that are both thicker and higher grade than previously estimated,” GBR MD Andrew Paterson says.

“Equally impressive is the deep result in hole 24MBRC030 which is well outside the resource, down-dip and further north than previous drilling in that area.

“After several rounds of drilling at Mulga Bill the high-grade lode positions fit our interpretation perfectly, which means we have very high confidence in the validity of this resource model.

The drilling has added high-grade intersections up-dip from previous holes on several sections within the resource, which should add gold ounces closer to surface than the current estimate. This will be important for potential mine economics when we start scoping studies.”

Shares in the gold digger are up 18.4% at time of writing to trade at 5.8c.

Power Minerals (ASX:PNN)

In a strategic move to expand its niobium exploration tenure in Brazil, Power Minerals has inked an option agreement to acquire the Tântalo project in Paraiba state.

It resides south of the company's Nióbio project and adjacent to Summit Minerals (ASX:SUM) Equador niobium project, where it has seen recent success of its own.

Power will make a non-refundable payment of $50,000 and carry out a 60-day due diligence period.

Source: PNN.

PNN says the acquisition would represent a major, material expansion of Power’s niobium, tantalum, REE and lithium-prospective ground position in Paraiba state, Brazil, and reinforces its position as a South American-focused explorer and developer.

"This is a key transaction in Power’s strategy to establish a significant footprint in an established exploration precinct in Brazil,” PNN MD Mena Habib says.

““Completing the acquisition of the Tântalo Project would materially expand our ground position in the region, which also hosts our Nióbio project.

“Our initial fieldwork at Nióbio has generated high-grade niobium, tantalum and REE results, and the Tântalo Project gives us the opportunity to adopt our successful exploration strategy on a larger project area, located just south of our existing tenure.

"With the Tântalo Project area being underpinned by Garimpo Licence titles, we aim to commence fieldwork, with drilling a priority, as soon as possible."

Burley Minerals (ASX:BUR)

(Up on no news)

BUR is on the rise on the back of a September 23 project update of its Broad Flat Well iron ore project in WA, a channel iron deposit that recently showed near-surface grades of upto 54.5% Fe.

The results of the maiden 47-hole drill program reflect last year's rock chip finds and the explorer is looking to establish further zones of higher grade Fe material.

More importantly though, moves and shakes around approvals for its Cane Bore iron ore project are happening.

Cane Bore Conservation Management Plan delivered to the Minister of Mines and Petroleum Office and DEMIRS for consideration and grant of the exploration license and BUR is currently engaging with traditional owners around completing heritage surveys at Cane Bore for a maiden drill program.

Shares are up >20% today to trade at 5.3c.

Labyrinth Resources (ASX:LRL)

$30 million capped Labyrinth is up again, with a whole bunch of executive movements bringing investors onside.

Monday’s close of the deal to acquire the Vivien mine, famously worked over by Ramelius Resources, came alongside a host of management and board changes.

Alex Hewlett and Kelvin Flynn are now on the board. Their list of credits between them include Spectrum Metals, Silver Lake Resources, MinRes, Delta Lithium and Wildcat Resources, the latter where the two worked on the transformational Tabba Tabba lithium deal.

Charles Hughes has flown in as CEO. A former Bellevue, Northern Star and Saracen man, the geo has led the drilling teams at Delta’s Mt Ida lithium and gold projects over the past three years.

It comes as the company reloads for a fresh assault on the gold potential at Comet Vale and Vivien, with a share consolidation upcoming and ~$2m entitlement offer in the works.

Previous CEO Jennifer Neild will take on the role as chief development officer.

At Stockhead we tell it like it is. While Labyrinth Resources was a Stockhead advertiser at the time of writing, it did not sponsor this article.

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

Originally published as Resources Top 5: Will there be a day when gold DOESN’T send ASX stocks crazy this week?!