Nelson Resources Ltd (ASX:NES) outlined its hunt for the next Tropicana-style gold deposit during a presentation for Proactive’s Resources Webinar on Thursday.
The Western Australia-focused explorer is working across four gold projects down under, encompassing more than 1,800 square kilometres of exploration tenure.
Of particular interest is the 100%-owned Woodline Project, which Nelson believes bears strong potential to follow in the Tropicana gold deposit’s 7.7-million-ounce footsteps.
The ASX-lister describes itself as a tightly-held corporate structure, with around 194 million shares on issue, an $8.2 million market cap and a $6 million enterprise value.
The value proposition
Nelson executive director Adam Schofield made the company’s case to existing and prospective investors on Thursday, commenting that Nelson was “pretty excited” about the opportunity in the Woodline area.
“We've spent $2 million on the project ourselves, we have a big land package, significant tenure, a lot of opportunity from a geological perspective and in our drilling and geophysics capabilities, and some real capacity to deliver expiration results in a timely and hopefully cost-effective manner.
“We want to think like a major whilst being a junior, and we currently have enough cash to see us out for 12 months, so we’re really excited”
Earlier this year, Nelson kicked off a 6,000-metre reverse circulation (RC) drilling campaign across the Woodline gold play, with some of the first results from the Socrates project announced late last month.
The program was expanded to 10,00 metres after Nelson intersected 500 metres of bedrock gold-bearing strike during initial sighter drilling at the Grindall prospect.
In addition to surveying and geophysics work, RC and diamond drilling will continue over the project’s Socrates, Redmill, Grindall and Morris prospects over the rest of the 2021 field season.
Woodline: hunting for next Tropicana
Around 170 kilometres southeast of Kalgoorlie lies Nelson’s flagship Woodline Project, a series of tenements and prospects forming a 1,226-square kilometre land package within one of Western Australia’s most gold-rich regions.
The package has seen plenty of historical exploration in the past, with the likes of Sipa Resources Ltd (ASX:SRI) and Newmont Mining Corp prospecting for gold in previous years.
But with its prospectivity comes popularity, and Schofield said: “it's a very busy area and tenure in this region is impossible to obtain.”
Nowadays, Nelson owns all of the Woodline package — an asset with an exploration footprint bigger than Tropicana — and all the historical exploration data.
Around $16 million has been spent on exploration at Woodline to date, pinpointing four sizable gold targets along the way.
The director continued: “We've had a significant amount of expenditure made within the company in the last 20 years, predominantly made by Sipa and Newmont, and they effectively dropped the tenure during the GFC.
“We spent the last three-and-a-half years pulling that all back together.”
Ultimately, the Woodline Project represents the intersection of three gold exploration opportunities:
- The Norseman-Wiluna Greenstones and Northern Foreland junction;
- The grossly underexplored 30-kilometre-long greenstone belt to the west; and
- The Tropicana-style gold targets, stretching 20 kilometres south.
Discovered in 2005, the Tropicana deposit sits within the Yilgarn Craton and Fraser Range Mobile Belt junction.
The resource is thought to host 7.7 million gold ounces, while the Tropicana Gold mine produced 298,000 gold ounces in 2020.
Schofield said: “On the Kundali fault, we have a 20-kilometre gold anomaly identified by Sipa/Newmont with very little drilling.
“Prior to starting drilling ourselves, there were only 77 holes drilled across 20 kilometres of potential strike.
“From an anomaly perspective, it looks very similar to Tropicana in its original discovery stage.”
Other projects
Not far from the Woodline gold play lies the Tempest Project, where Nelson has “a significant amount of geophysics planned later in the year.”
The project is a 105-square-kilometre tenement on the eastern boundary of the IGO Limited (ASX:IGO) and Rumble Resources Ltd (ASX:RTR) Thunderstorm Joint Venture.
A bit further out lies the Yarri Project, which is made up of three gold prospects.
Nelson conducted its maiden, 19-hole reverse circulation drilling program at the Wallaby Prospect in January 2018, intersecting:
- 1 metre at 10.8 g/t gold from 15 metres;
- 2 metres at 4.87 g/t from 13 metres;
- 5 metres at 10.67 g/t from 52 metres; and
- 1 metre at 2.17 g/t from 16 metres.
Speaking to the asset’s potential, Schofield said: “The Yarri Project is an old historical goldmine on Medina station, which we have spent a fair bit of money drilling.
“There are the makings, potentially of a small resource within that.”
Finally, Nelson’s Fortnum Project is described as “a small land package that has had expenditure made previously by WestGold Resources Ltd, among others.
Schofield concluded: “We intend to spend some time on that in the future.”
