Riversgold Ltd (ASX:RGL, OTC:RVSGF) earlier this week reported that assay results from the first six drill holes at its Kalgoorlie Gold Project had exceeded expectations.
The company said the results came from a two-phase program targeting shallow mineralisation. Chairman David Lenigas told Proactive that the outcome was “much better than what I originally thought they were going to be.”
Riversgold recently announced a joint venture with Mega Resources. The company said the partner will fund all development costs required to bring the Kalgoorlie project into production. It said production is targeted to commence early next year.
Riversgold stated that the agreement includes a 50/50 profit share and allows for additional exploration expansion. Mega Resources will manage all site operations.
The company highlighted that the mineralised porphyry system at Kalgoorlie is approximately 600 metres wide. It has been drilled to a depth of around 500 metres. It said current drilling is focused on the top 50 to 60 metres of the system to support a potential near-term trial pit.
Lenigas said the company intends to keep “step-out drilling” to extend the known extent of mineralisation and define a larger initial pit. Riversgold stated that while the full strike length of the system is still unknown, it sees significant potential for near-surface gold mineralisation.
The first shallow drilling program concluded recently, and assay results are now being returned from the laboratory. Riversgold said a second drilling campaign is underway and will continue into December. It expects to submit new sample batches every few days and to release results consistently over the next six to eight weeks.
The company said the strategy remains focused on defining a shallow, high-grade resource in the short term while progressively building knowledge of the broader system.
Proactive: Welcome back to Proactive Newsroom. I'm now joined by Riversgold's chairman David Lenigas. David, it's good to see you. How are you?
David Lenigas: Yeah. Hi. I'm very good. Got over my jetlag from London and I'm ready to kick some goals and gold in Kalgoorlie.
Proactive: Quite a bit happening in Kalgoorlie, and definitely keeping shareholders quite happy. Your share price is up some 8% at the time of this recording. You've released assay results from the first six drill holes at the Kalgoorlie Gold Project. What's been the top highlight?
David Lenigas: Yeah. Look, we've done a deal with Mega Resources, who are going to be putting us into production next year. What we've said to Mega is, let us keep drilling the top 50 to 60 metres of this project deposit area. So when you do start off the trial pit, we've got a much bigger scenario.
The first couple of results have come back from a fairly extensive two-phase program, and they're exactly what we thought. In fact, they're better. They're much better than what I originally thought they were going to be. So we're very excited.
Proactive: It's interesting you mentioned Mega just then. You've announced a joint venture with Mega Resources recently. How much value do you think this will bring on board?
David Lenigas: Very significant value. Mega Resources have agreed to fund all of the costs to put the Kalgoorlie project that Riversgold has into production. The plan is to be digging early next year. They've got their own assessment of tonnes and grade. They're a private company and they're very happy with what they've seen.
I can't put numbers on it because it's not durable from a reporting perspective. But we're very excited about the significant potential for cash flow revenue for the company. Mega will be funding everything. We have a 50/50 profit split and we also have an exploration expansion part of the scenario that we've contracted as well.
Everything will be run by Mega. In the meantime, we just said, can we keep drilling? We'd like a much bigger potential initial pit when you do start off. So that's what we're doing.
Proactive: Let's step back into the Kalgoorlie Gold Project. You're set to continue advancing your understanding of the project before proceeding with the maiden Mineral Resource Estimate. How's that tracking along?
David Lenigas: Yeah. Look, it's very good. This is a very, very large porphyry. We've already disclosed the porphyry system that's mineralised with gold is about 600 metres wide. To date, we've drilled it down to about 500 metres in depth. We don't know the strike extent of it, but what we're drilling at the moment is principally the top 50 to 60 metres because that's the area that Mega Resources want to focus on for initial trial pits.
So, we just keep doing step-out drilling—step out, step out, step out—get grades, get grades, keep stepping out. The plan is to hopefully join everything across so we'll have a 600-metre-wide pit. The length of it, we don't know yet, but there's a lot of gold there. We're just going to keep progressing it.
Right now, a lot of our work is shallow because that's what's on the near horizon. As we move forward, we'll start drilling a bit deeper. But right now, it's all about shallow resource-type drilling.
Proactive: And your second shallow drill program is well underway, I believe?
David Lenigas: Yeah. We finished the first program a couple of weeks ago. Those results are now starting to come through the labs, which is what we started reporting this morning. The second program—we've got a lot of holes planned for that. I think we'll be drilling up until probably a week before Christmas and putting in batches of samples every two or three days.
So I can well imagine that we'll be reporting drill results for the next six to eight weeks.
Proactive: Riversgold chairman David Lenigas, thank you so much for your time.
David Lenigas: Yeah. Pleasure. Thanks.