Catalyst Metals is seeking untapped corners of the Bendigo Goldfield - it might have found one

Catalyst Metals (ASX:CYL) shares were solidly higher in mid-afternoon trades on Tuesday, after the company revealed its exploration team believes its found an extension of the prolific Victoria-based Bendigo Goldfield. 

As at 1420 AEST Thursday February 9, shares were up 3.08% to $1.34. The company’s Bendigo project is called Four Eagles. 

The healthy jump comes on the back of Catalyst’s report that it has detected visible gold in eight different drill cores in a target area called the ‘Iris Zone.’ 

“We have always suspected that there would be stacked gold zones below the shallow Boyd’s Dam mineralisation but previous drilling has not been done with the optimal orientation,” company Technical Director Bruce Kay said. 

“The Iris Zone appears to be very consistent and visible gold is always exciting.”

Four Eagles is held in a 50/50 structure between Catalyst and privately held Gold Exploration Victoria (GEV), a subsidiary of Gina Rinehart's Hancock Prospecting.

GEV is earning a 50% interest in Four Eagles. 

Rigs back to rumbling  

Diamond Drill (DD) rigs are currently back on-site at Four Eagles after the east coast’s recent run of wild weather has subsided enough for rigs to safely be brought back online. 

DD drilling is currently live at Four Eagles, with reports from the latest exploration campaign to be reported in the coming weeks and months. 

What’s the significance of a DD rig? 

DD drill rigs return whole cylindrical cores to the surface, as opposed to Aircore (AC) or Reverse Circulation (RC) drilling, which collect rock chips from underground. 

DD rigs can typically drill at superior depths to RC and AC drill rigs, but are more expensive to run. For this reason, DD rigs are typically only brought in once substantial RC drilling (which is cheaper) provides enough evidence to warrant the capex. 

In short: DD rigs are used when an exploration team is highly confident it has identified a mineral deposit. 

“Pivotal breakthrough”: Management 

Technical Director Kay described the find of visible gold in eight cores as a “pivotal breakthrough.”

Assay results to confirm the concentrations of gold in each core remain pending. 

The Iris Zone, from where the eight cores reported today were pulled, has before seen material sent off to assay, with high-grade pockets of gold confirmed in the area. 

To make sense of the below, note that investor information provider Undervalued Equity classifies high-grade gold as that in concentrations over five grams of gold per tonne of ore (5g/t). 

Previous hits include: 

• 5.6m @ 54g/t gold 

• 01m @ 150g/t gold 

• 1.3m @ 78g/t gold 

• 5.5m @ 10g/t gold 

• 5.4m @ 05g/t gold 

Iris Zone proof of exploration thesis 

“[The] Iris Zone presents first clear proof of concept that Four Eagles contains the same structural style as the 22-million-ounce Bendigo Gold field, where high-grade zones repeat at depth,” the company wrote on Thursday. 

The Iris Zone is the kind of target only an underground mine could embrace. 

It is located 150m beneath an already-known shallow mineralisation system at the Boyd’s Dam target which constitutes the lion’s share of Catalyst’s current Four Eagles Mineral Resource Estimate (MRE). 

“Iris lies within a near-vertical shear zone striking almost north south and containing abundant quartz, often laminated with…native gold,” the company wrote. 

Underground mine economics 

“Importantly, Iris adds to the number of high-grade zones close to the proposed exploration tunnel, potentially changing project economics.” 

Underground mines are eye-wateringly expensive, and so the less tunnelling the company has to do before it hits gold, the cheaper it will be overall in terms of capex. 

This also suggests a more desirable rate of investment return for shareholders, but only a Definitive Feasibility Study (DFS) could confirm or deny that later down the line. 

“Catalyst has identified a number of high-grade areas of mineralisation close to one another [including] Boyd’s Dam, Hayanmi, Pickles, Cunnenns, Eagle 5, Bullock and Iris,” the company wrote. 

“These areas of stacked, repetitive mineralisation have the potential the change the project’s economics and could eventually all be mined from one access tunnel.” 

Catalyst Metals' one year charts