White Rock Minerals Ltd (ASX:WRM, OTCQX:WRMCF) has finalised its merger with former ASX-lister AuStar Gold, bringing a large, underexplored land package and a small-scale underground gold operation into the fold.
The Woods Point Gold Project, formerly explored and managed under AuStar’s banner, covers 670 square kilometres in one of Victoria’s largest historical goldfields.
White Rock has also acquired the project’s past-producing Morning Star Gold mine, the 80,000-tonne-per-annum processing plant and a 23-person workforce.
With a new gold asset under its belt, WRM intends to develop a strategic, systematic exploration plan to better understand the project’s regional and in-mine priority targets.
“Significant opportunities”
White Rock managing director and CEO Matt Gill said: “The acquisition of the Woods Point Gold Project in Victoria offers significant opportunities in this undervalued, in demand, large, highly prospective exploration tenement package located in one of Victoria’s largest historical goldfields.”
“The regional exploration and in-mine potential is significant, and any success here is enabled by the existence of an approved mining licence and the small but high-grade functional underground gold mine and its gold processing plant; not many junior exploration companies can make that claim.
“The addition of this asset complements White Rock’s other assets — our silver-rich zinc VMS and IRGS gold project at Red Mountain in Alaska and our advanced epithermal gold and silver project at Mt Carrington in NSW."
In it for the long haul
After merging with AuStar on August 23, White Rock gained access to a multi-faceted gold asset that boasts exploration and production opportunities.
The large-scale package has seen minimal, systematic exploration over its 50 prospects, while modern drilling records indicate there’s sparse coverage.
The accompanying Morning Star gold mine is a historically producing asset — in the past, it generated more than 800,000 gold ounces at a 26.5 g/t average grade, while an on-site gravity gold processing plant was able to churn 80,000 tonnes per annum.
When it comes to its development strategy, White Rock is determined to play the long game.
That’s because the Victorian gold scene is experiencing a renaissance, led by the Fosterville and Costerfield assets — high-grade gold mines that rank in the top ten in the world.
White Rock believes Morning Star has the potential to produce gold at grades that also catapult it to these ranks, so the immediate focus is on ceasing producing and putting all efforts into underground exploration.
From this, the ASX-lister hopes to build a resource base that can support a long-term production plan.
“One of the most prolific gold belts on earth”
Crescat Capital Dr Quinton Hennigh said: “The acquisition of AuStar gives White Rock control over one of the high-grade gems of the Victorian goldfields.
As the acquisition is not expected to significantly impact White Rock's current exploration momentum in Alaska, it gives White Rock shareholders exposure to a potentially high-value year-round exploration asset in one of the most prolific gold belts on earth.
“Along with this comes the element of gold production at Morning Star which, after a hiatus while in-mine exploration drilling occurs, White Rock plans to ramp up to underpin White Rock's cash flow going forward.
“Such an acquisition opportunity comes along rarely and is expected to help White Rock build a solid foundation upon which to grow.”
Exploration underway
In terms of in-mine exploration, although some areas have been pursued by previous owners, White Rock is particularly interested in regions that have seen little-to-no exploration, such as the Gap Zone.
Drilling has already got underway, with a second rig primed to arrive soon and enable the company to test the full length and depth across the Gap Zone.
Looking at Woods Point’s regional targets, White Rock intends to employ systematic, modern exploration to get a sense of the asset’s prospectivity.
However, the regional terrain is described as “extreme”, so the ASX-lister admits it will take time and energy to identify new targets in time.
Drill testing across the asset’s regional historical mine prospects, starting with the Wallaby target, is primed to commence in the summer months.
All in all, White Rock believes its exploration strategy will balance three key aspects:
- Near-term production opportunities in-mine at Morning Star;
- Near-term drill targeting across historic prospects with high-grade discovery potential; and
- Longer-term generation of new targets over a multi-year exploration campaign.
Advancing on home soil
Reflecting on its latest acquisition, the company maintains the Woods Point project complements its existing portfolio while bringing something new to the table.
Some of the advantages include having a domestic asset that can leverage Victorian management and team members, eliminating some of the headwinds associated with managing overseas assets during a global pandemic.
The asset can also provide year-round newsflow, helping to offset the seasonality of news from White Rock’s Alaskan project.
Finally, the merger means the company emerges as a larger ASX- and OTCQX-listed player with a more diverse exploration and production portfolio.
Gill concluded: “One of White Rock’s strengths is its exploration, project development and mining expertise and we intend to bring that to bear on this asset.
“Importantly, given the company is based in the historical gold mining town of Ballarat, having an asset on our doorstep ensures that we can manage and operate, even in this current restrictive COVID-19 environment.
“We intend to pursue a systematic exploration program regionally, where the size of the prize is significant, as well as test the many opportunities that we believe still exist to be drilled and discovered underground at Morning Star.”