Kingwest Resources Ltd (ASX:KWR) has completed a strongly supported capital raising of $4 million (before costs) from professional and sophisticated investors via a placement of 33,333,334 ordinary shares at an issue price of $0.12 per share.
Funds will be used to accelerate exploration activity at the Goongarrie Gold Project, with particular focus on follow-up drilling at the recently announced Sir Laurence Discovery – a Kanowna Belle-style litho-structural gold discovery lying under Lake Goongarrie.
The money will also be used for:
- Extensional/resource definition drilling at Menzies;
- Progressing and executing further Menzies commercialisation transactions; and
- General working capital purposes.
Kingwest CEO Ed Turner spoke to Proactive about the raise and the company’s exploration plans:
KWR to start Sir Laurence drilling
KWR is set to launch a drilling campaign at its Sir Laurence discovery within the Goongarrie Gold Project.
First pass aircore drilling at Sir Laurence encountered +1 g/t gold in 12 holes over a >400-metre line of drilling across strike with another hole drilled some 100 metres north of this line hitting 4 metres at 1.7 g/t gold.
With mineralisation open in all directions, KWR will conduct deeper diamond and RC drilling to define the primary mineralisation at Sir Laurence.
The drilling campaign will include:
- 1,000-metre diamond program testing primary controls - November 2021;
- 6,000-metre aircore program to test structural targets along strike from Sir Laurence (underway); and
- RC drilling booked for early 2022 to pattern drill best zones.
“We are very excited by our initial exploration success at Sir Laurence and eagerly anticipate the imminent drilling campaigns which we hope will confirm a large gold system,” Turner said.
“This capital raise will provide the company with sufficient funding to test Sir Laurence and other regional targets in the period ahead of expected cash-flow from our Menzies mining JV which we hope will supplement future exploration expenditure.”
Menzies JV
On October 6, KWR announced it had agreed to form a mining and processing joint venture aimed at restarting gold production at the Menzies Project in Western Australia.
The JV with FMR Investments Pty Ltd will see the companies profit share from the underground mining development of Yunndaga resource at the Menzies Gold Project.
FMR yesterday commenced a 6-hole diamond core drilling program to target the highest-grade depth extensions to the underground resource. This will aid FMR with planning of the decline and underground development drives next year when underground mining is planned to recommence.
What’s next
Work at Menzies and Goongarrie should keep KWR busy for months to come, however, the capital raised will also be applied to:
- A 2,000-metre aircore drilling program to follow up other Lake Goongarrie targets that returned significant results in the first round of drilling;
- Follow up at a KWR gold discovery at Target A9 at GGP which lies along strike from the Bardoc Gold Ltd (ASX:BDC) 1.7-million-ounce Aphrodite deposit and Ardea Resources Ltd (ASX:ARL)’s Aphrodite North discovery. Target A9 has yielded results from aircore drilling including 6 metres at 17.2 g/t gold within 38 metres at 3.1 g/t from 62 metres; and
- Explore for near-surface and depth extension mineralisation at the Menzies Gold Project, specifically targeting high-grade shoots at several prospects to add to the current mineral resource estimate at MGP of 475,000 ounces at 1.4 g/t.