Highlights
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Wiluna West Gold Project to advance following major review and reinterpretation of geophysics;
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Wiluna West gold ore processing discussions continuing;
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RC drilling program for Hatches Creek commencing early November;
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Successful drilling campaign at Mt Mulgine for Tungsten Mining (GWR 13.3%);
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Reconnaissance mapping and rock chip sampling undertaken at Nardoo Well tungsten / lithium project.
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Strong balance sheet with $7.6m cash, no debt and $5.64m in listed securities and other material financial assets.
Wiluna Gold Project - Ore Processing Discussions
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GWR and Blackham Resources (ASX: BLK) remain in discussions concerning the potential for the processing of ore from GWR's Wiluna West Gold Project through the Wiluna Gold mill - refurbished and first gold pour achieved by BLK.
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A detailed review of known gold deposits and previous exploration results within the Wiluna West project has been completed which will underpin studies towards commencing production via an ore milling agreement. The review also identified exploration targets that are currently being followed up.
Hatches Creek Polymetallic Tungsten Project
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Dump sampling across 14 prospects confirms widespread tungsten mineralisation, with several prospects also containing copper or gold mineralisation.
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Following the receipt of all relevant approvals, an RC drilling program is scheduled to commence in early November to test for high grade tungsten mineralisation beneath the extensive historical mine workings.
Investment in Tungsten Mining NL (ASX: TGN)
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Shallow drilling at Mulgine Hill confirms up-dip potential of mineralisation.
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Core sampling program of historical core confirms the potential to add to existing intersections plus to identify new zones of mineralisation from historical Diamond drilling.
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Work has advanced on the Mt Mulgine Strategic Development Plan, with drilling and mineralogy completed during quarter. Infrastructure, mining and environmental studies planned for December quarter.
Project Generation & Acquisitions - RWG Minerals
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RWG has undertaken reconnaissance mapping and rock chip sampling at its Nardoo Well tungsten lithium project. The mapping identified broad zones of pegmatite some of which contains anomalous LiO2. Significant tungsten mineralisation was also identified in an area with a rock chip sample returning 3.4% WO3
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At the Twin Hills gold project, a review of historical exploration results has commenced and public domain aerial magnetics have been purchased and processed
Corporate
About GWR
GWR Group Limited ("GWR") is an independent, Australian resource house, focused on creating shareholder wealth through the development of high quality mineral exploration and development projects.
The Company has a portfolio of mineral commodity projects that includes projects held in its own right, in joint venture and indirectly through investment in other listed entities. We aim to create value through operational excellence and innovation in exploration and project development. We will collaborate with our stakeholders to build a sustainable mining business and the respect of our peers.
Corporate Summary
ASX code: GWR
Issued Capital: 242.28 million
Issued Options: Nil
Cash on hand: $7.6 million
Board & Management
Gary Lyons
Non-executive Chairman
Mick Wilson
Executive Director
Tan Sri Dato' Tien Seng Law
Non-executive Director
Kong Leng (Jimmy) Lee
Non-executive Director
Datuk Chin An (CA) Lau
Non-executive Director
Mark Pitts
Company Secretary
Craig Ferrier
Chief Executive Officer
Wiluna West Gold Project
In view of the current gold price (circa A$1700/oz), GWR continues to review opportunities to achieve positive cashflow by mining portions of its JORC Code 2004 gold Resource of 3,478,000 tonnes at 2.3 g/t Au for an estimated 258,000oz Au (estimated at a 1 g/t lower cut off). This includes an Indicated Resource estimate of 46,000 tonnes at 3.5 g/t Au for 5,200 oz and an Inferred Resource estimate of 3,432,000 tonnes at 2.3 g/t Au for 253,000 oz. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
Blackham Resources Limited ("Blackham") (ASX:BLK) have completed the refurbishment of the Wiluna Gold processing plant with their first gold pour announced on 18 October 2016. GWR and Blackham are in discussions concerning the potential for the processing of ore from the Wiluna West Gold Project through the Wiluna Gold mill, given there is only 40 km distance between the projects by road.
These discussions are preliminary in nature and there is no certainty that the discussions will lead to an agreement. Further announcements will be made as and when required.
Work undertaken on the Wiluna West Gold Project during the quarter has included a detailed review of all previous exploration results, known gold deposits and re-interpretation of aerial magnetic data. The existing aerial magnetic data is of high quality (50m line spacing) and this data has previously been modelled and interpreted with the focus on iron ore exploration. Respected industry consultants Southern Geoscience Consultants ("SGC") were engaged to re- interpret the magnetic data from a gold mineralisation perspective and this work has identified a total of 60 litho stratigraphic targets of which 23 are rated as high priority. The results of this work is currently being compiled and will be finalised early in the December quarter where the following is expected;
Hatches Creek Tungsten Project
Dump Sampling Program
The sampling program involved the assessment of mining dumps that were thought to be established between 1915 and the early 1970s. Numerous prospects were mined by underground methods to shallow depths, with ore and waste stockpiles located close to the shaft collars.
GWR used the results of an unmanned aerial vehicle survey (UAV) undertaken in mid-2015 to identify and target previously unsampled dumps from fourteen of the historic prospects and sampled the dumps. The samples, which weighed between 5-15kg and averaged 9kg were then dispatched to Perth for multi-element analysis.
128 of the 138 samples assayed greater than 0.10% WO3, with numerous results above 0.50% WO3. 12 of the samples returned high grade tungsten results of greater than 1.0% WO3.
The following prospects contained very significant results that will be prioritised for future work:
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Pioneer - Anomalous tungsten mineralisation up to 0.9% WO3 and gold mineralisation up to 1.19g/t Au. The average grade across all the samples was 0.38% WO3 and 0.39g/t Au;
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White Diamond - Of the six samples collected from this prospect, all were above 0.5% WO3 and three of them were greater than 1.0% WO3 (maximum 1.64% WO3), and
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Copper Show - Four of the five samples collected at Copper Show recorded very high tungsten assays of 3.47% WO3, 2.36% WO3, 1.33% WO3 and 1.11% WO3. These four samples also assayed high grade copper, with a
range of 1.0% Cu to 3.7% Cu, with an approximate correlation between the copper and tungsten grades.
Full assay results are set out in Appendix 2.
Research on historical mining areas
Hatches Creek was a large historical tungsten mining area, with numerous shafts and dump sites across the project area. The largest prospect was believed to be the Pioneer Mine, where an operation including a 50-person camp was established.
Recent research by GWR has identified that the mining operation at Pioneer continued well beyond the previously thought date of 1960, with evidence showing the mine was operational up until the early 1970s.
The research has also identified that the development of underground workings was more significant than previously thought, with at least one further level developed below the previously understood workings.
The Company has now commenced a more detailed search of records within the Northern Territory Mines Department and other sources aimed at identifying further information on Pioneer and the other prospects.
RC Drill Program - December quarter
GWR has received approvals for a drilling program at Hatches Creek, with a drilling contractor scheduled to mobilise to site in early November.
The drill program will test targets at 10 of the historical mines; including Pioneer, Hit or Miss, Treasure, Copper Show, Black Diamond and Bonanza.
Wiluna West Iron Ore Project
Figure 1 - Hatches Creek Project Location
The Wiluna West Iron Ore Project (WWIOP) is an exceptional DSO iron ore resource, which metallurgical tests have demonstrated will produce a high grade, low impurity iron ore. Details of Mineral Resources and Ore Reserves for the WWIOP are set out in the Company's 2016 Annual Report, available at www.gwrgroup.com.au. Mining approvals are in place for large scale mining operations (up to 7Mtpa) over an initial mine life of 10 years. GWR has no immediate plans to commence development of the WWIOP, however these approvals position the Company to derive maximum value from the project through the commodity price cycle. No activities other than care and maintenance are envisaged, with expenditure exemptions under the Mining Act currently in place.
Investment in Tungsten Mining NL (ASX: TGN)
GWR hold a 13.3% equity interest in ASX-listed company Tungsten Mining NL ("Tungsten Mining") (ASX:TGN), an Australian based resources company whose prime focus is the exploration and development of tungsten projects in Australia. Since August 2014, GWR has been responsible for the provision of management and technical services to Tungsten Mining.
Tungsten is a high value industrial metal used in the manufacture of hardened metals (cemented carbides), steel alloys and mill products. Its application in heavy construction machinery, drilling for minerals and oil/gas and in high temperature equipment makes tungsten a mineral of strategic importance.
Tungsten Mining has three advanced tungsten projects in Australia - the Mt Mulgine Project in the Murchison region, the Big Hill Project in the Pilbara region and the Kilba Project in the Ashburton region of Western Australia. Together these projects contain a tungsten mineral resource of 88.6 Mt at 0.18% WO3 and 186ppm Mo, representing more than 15.5 million MTU (metric tonne units) of WO3 and 16,482 tonnes of molybdenum at a 0.10% WO3 cut-off grade, making it one of the largest tungsten mineral resources held by an ASX-listed company. (Refer ASX Release for TGN dated 23 June 2016 "Mineral Resource Update and Core Sampling Results" for a detailed JORC-2012 breakdown).
Tungsten Mining is currently identifying opportunities for near term tungsten production, particularly from the Mulgine Trench and Mulgine Hill deposits within the Mt Mulgine Project.
During the September quarter, Tungsten Mining reported the following activities:
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RC and Diamond drilling of the shallower portions of the Mt Mulgine and Mulgine Trench deposits;
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Collection and analysis of material for mineralogical studies;
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Commencement of metallurgical studies for Mt Mulgine;
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Identification of deep widespread tungsten mineralisation at the Black Dog gold prospect at The Trench, and
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Deepening engagement with the Chinese market via a new Chinese language presentation and website. Full details of these programs can be found in the Tungsten Mining - September Quarterly Report.
Figure 2 - plan displaying hole location, shallow targets and 2016 Mineral Resource outline at Mulgine Hill.
Investment in Corizon Limited (ASX: CIZ)
GWR holds a 10.16% interest in ASX-listed company Corizon Limited (formerly named West Peak Iron Limited) (ASX:CIZ).
CIZ have recapitalised the company during the two prior quarters and reported a cash balance of $1.96m as at 30 June 2016. CIZ have also advised that it continues to review and appraise new commercial opportunities both within and outside the mining sector.
Excelsior Gold Funding Agreement
In June 2016, GWR entered into an agreement with Excelsior Gold Limited ("Excelsior Gold") (ASX: EXG) to provide interim funding to Excelsior Gold to advance mining and exploration activities at its Kalgoorlie North Gold Project.
Excelsior Gold is a gold production company focussed on the mining and development of the Kalgoorlie North Gold Project. Mining commenced in November 2015, with ore processed through the nearby Paddington processing plant operated by Zijin subsidiary, Norton Gold Fields.
Pursuant to a binding term sheet ("Term Sheet") GWR provided interim financing of $2.25 million by subscribing to approximately 17.2 million convertible notes ("Convertible Notes") at an issue price of $0.0387 per Convertible Note and lending Excelsior a further $1.59 million ("Loan"). Both the Convertible Notes and the Loan are repayable in June 2017 and accrue interest at the rate of 12% per annum quarterly in arrears.
GWR director, Mr Jimmy Lee, was nominated by GWR to be appointed to the Excelsior Gold board pursuant to the Term Sheet and remains a director.
GWR received an interest payment of $68,055 during the quarter.