This comment has been mainly drawn from a presentation that RNC (Royal Nickel Corporation - RNX.TSX www.rncminerals.com ) made at Kerry Stevenson’s Symposium Conference in Perth in October 2018, plus post presentation discussions with RNX, RNX’s November 2018 presentation and ERA’s own knowledge from visiting Beta Hunt in 2005 and 2006 (reports available on the eagleres website) when it was owned by Consmin (CSM).

That the gold and nickel mineralization are mixed together at Kambalda (and to some degree Widgiemooltha) is well known, with gold being present at Beta Hunt (just south of Red Hill and the Kambalda nickel discovery hole). Red Hill was one of the first gold mines in what became Kambalda in ~1897 and reputedly historically mined ~0.5moz gold up to ~1966. Depending on which version you believe in, nickel sulphide was encountered at the end of a gold mine drive, and the discovery hole that resulted in WMC’s nickel division was drilled ~30m ahead of that drive in January 1966.

Gold is recorded as having been encountered in the Long nickel mine, especially heading north towards Durkin, but it appears to have been more commonly encountered at Beta Hunt, with its association and reason for its location identified (according to page 7 of ERA’s June 2006 report), as being the interaction of shear/fault zones with the nickel sulphide basal contact (the contact between the basalt in the footwall and ultramafic in the hangingwall). As in the gold was a later depositional event that was fed from the shear zones into the lava/basalt contact.

This basal contact has been 3d modelled for all of the domes (Kambalda, Widgiemooltha, and Lanfranchi), with the nickel sulphide mainly associated with embayments in the contact. The easiest practical example is the recent Kilauea eruption in Hawaii with the rivers of lava – Kambalda is the same with the nickel following the path of the rivers eroding channels or embayments in the underlying rock as shown in Paydirt in 2007 (http://www.eagleres.com.au/paydirt/item/jul-2007-nickel-lava-channels) and then it was folded and faulted to create the 3d Beta Hunt model shown inset in the Figure (also on page 5 of the 2006 report and shown inset in the Paydirt article).

But Beta Hunt had a reputation - which is why it was for sale, had been for sale for some time, and no one was really interested, especially in Australia. And that was its weak ultramafic hangingwall. Consmin tried to resue mine the nickel sulphide in development (ie cut under the sulphide, take out the piece of sulphide, and then take out the rest), but dilution was high, average grades relatively low, tough going. And the ultramafic ground conditions were reputedly worse on the developing east side than the west side of the ridge.

RNC had Beta Hunt for sale, BUT then they “struck lucky” and (similar to Kirkland Lake’s Fosterville) observed that there was a potentially high grade gold zone deeper in the mine. In Beta Hunt’s case it was only ~100m to 150m deeper into the footwall and associated with a pyrite-rich zone. However, because of its location it hence has a basalt footwall and basalt hangingwall as shown inset in the Figure – ie excellent mining conditions, plus it had development next to it.

However, it was still not that obvious, as illustrated by the track record. September 2017 est 740oz of specimen gold (ie gold & quartz) associated with pyritic sediments (A Zone – 14 Level); June/July 2018 : est ~1500oz (A Zone – 14 Level); July/August 2018 : est 177oz (A Zone – 15 Level); September/October 2018 : est 27 to 30koz gold (A Zone – 15 Level). The discovery was called the Fathers Day lode discovery because it occurred on 2 September 2018 – which is Australia’s Fathers Day, compared to most other countries where it is about mid-June (although originally it occurred in March).

Apparently Jumbo development on 15 Level was not having any luck, so they switched to airleg development in the hangingwall and that wasn’t finding anything either after 3 or more cuts, so RNX switched to airleg development in the footwall, following an extensional vein, and 3 cuts later – bingo !. It was later commented that the gold discovery was in fact only ~2 levels under where WMC had stopped their original decline.

It has been stated that the gold in quartz specimens recovered and shown at the conference all came from a ~10m length or about the length of a long dining room, and most of it would possibly fit into a typical lounge/sitting room. Some of the specimens are shown inset in the Figure, being the two largest, namely 63kg and 95kg. The specimens were (end November 2018) on show at Mines & Money London and expected to take a global circuit including China before being auctioned in January.

No detail has been given of how the gold content of the specimens has been estimated (as far as I have seen), however, the NSW Holtermann gold nugget was a ~286kg gold & quartz specimen stone that was found to contain 93kg (ie about 1/3 or 32.5% gold).

Of course the next question is “is that it or is there more ?” That’s where it starts to get tricky as many in Australia are aware where many visible gold distributions are concerned. Theoretically there could be more – the gold especially in that quantity has to come from somewhere, although many of the historical goldfields in Australia had slugs or material gold that was not replicated. I have also seen circumstances where a “patch” of visible gold has been discovered, but the next patch/pocket has seemingly been a very erratic distribution.

I recall seeing that visible gold at Silver Lake (SLR) s Daisy Milano at up to 6kg/t on one level and in one area in 2008, which resembled someone dipping a paint brush in gold paint and randomly marking the walls / roof etc but that was it, and so far has still been it, at that tenor, whereas some other mines have found visible gold more regularly.

As for Beta Hunt, at least RNX now have a war chest to drill/explore that they can use (and a queue at the door if they want to raise more money) as opposed to being in debt and having what was thought to be an unprofitable mine for sale. On November 28, RNX stated that they currently have 3 drill rigs following a 40,000m programme to be completed by April 2019.

The first drill has been planned to focus on the expansion and drill definition of the sediment layer in the shear zone associated with the “Fathers Day Discovery" in the A Zone area, which has accounted for most of the coarse-gold production in 2018. The second drill was to be located at the northern end of the Western Flanks shear for definition drilling of the main shear and the recently identified sediment layer. While the third drill has two purposes: tight infill drilling in the sediment zones and resource infill drilling of the main shear zones.

What is more interesting is that Beta Hunt and Fosterville were both regarded as “dogs”, yet they have had amazing deeper significant gold mineralisation discoveries – both by Canadian/US based companies.

Bellevue Gold’s Bellevue mine was also once classified as a dog by Plutonic and Plutonic closed it ~20 years’ ago in 1997 and no one was interested – after all it was supposed to be truncated at depth – except that the geology had been misinterpreted. Fortunately, the mine was taken up by Draig although it could quite easily have been a foreign/overseas company. The next most obvious question is “are there other gold mines in Australia that have at some stage been classified as dogs, but have a hidden deeper secret”.

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with State One Stockbroking (AFSL 247100).

Figure. The Beta Hunt Gold Discovery