in reply to a broker that ERA's next report was to be on Morning Star at Woods Pont, he remarked "oh no, not Walhalla, if you are talking about Walhalla then the gold market has to have peaked, no one has made money out of Victoria for many years". Yes the gold market was at a peak, but not necessarily for that reason.

It is true though, whether it is east (Woods Point to Walhalla) or west Victoria (Ballarat and Bendigo etc) many gold companies have failed to make a profit in Victoria, and fallen by the wayside. In east Victoria, A1 Gaffneys (AYC) almost went into receivership, but is surviving due to a change in direction; Goldstar (GDR) which became Orion (ORN) has finally abandoned (after ~13 years) its Cohens mine at Walhalla and Eureka and Tubal Cain dyke bulges in a sale to A1 (AYC), as part of a strategy of heading into copper at Prieska in South Africa.

More recently, Mantle Mining (MNM) is in the process of acquiring the Morning Star gold mine and tenement package at Woods Point, after Morning Star gold opened and closed within months in about 2011, on the 150 year anniversary of Woods Point. Morning Star targeted where it thought there was an unmined visible gold in quartz ore block at the mine, but decided not to delineate it by drilling and instead developed for it and then found it was not there. It had built its Gecko plant and that closed after treating ~3kt of ore.

The Woods Point to Walhalla goldfields consists of a NW/SE striking dyke swarm (of possibly more than 100 dykes), in which some of the dykes have bulged out along their length (hence dyke bulges) which were injected with a stacked sequence of mostly visible gold in quartz veins in which (at Morning Star) the higher grade mineralisation appears to often be at the up-dip side on the vein boundary where it passes out of the dyke into the surrounding sediments as shown in the figure, or throughout the dyke such as the Victory lode at A1.

The representation of the lodes/veins in the dykes has become significantly easier as shown in the figure, with Leapfrog's 3d software package (which was not in use in 2011) - I first encountered it in ERA's August 2013 Sirius report.

So how did the 2011 Morning Star operators get it wrong - well they appeared to have ignored the historical records and focused on the down-dip side of the vein entering the sediments from the dyke boundary, and on the notoriously often weakly mineralised eastern side of its dyke bulge - as detailed in WMC's GMA (Gold Mines of Australia's) records up to its 1963 closure.

While that target did not work, the trial mining of the dyke access in the roof of the adit leading to the Rose of Denmark (ROD)'s dyke bulge surprisingly averaged an unexpected ~8g/t when processed. And that ROD ore resembles a ladder vein system across the narrow dyke as shown in the Figure. In fact the ROD was mostly mined and stoped outside of its dyke bulge over its ~60 year history from 1864 to 1926, producing almost 40koz at ~13.7g/t.

AYC is mining a breccia block on the edge of its dyke bulge as also shown in the figure, and expected to realise ~10g/t to 11g/t. The delineated 30kt block of breccia at A1 is expected to be mined and treated at AYC's 150ktpa plant at Maldon over 6 to 8 months and realise ~10koz, inferring that AYC could be capable of producing ~20kozpa to 30kozpa or more - a far cry from receivership.

The Morning Star dyke bulge also contains a number of breccia intersections that have previously not been considered, especially in the "gap" areas between its major lodes. Some of the breccias have different coloured clasts and sometimes the quartz is laminated (grey) - which was usually a preferred target.

Despite mining dyke bulges for over 150 years, it comes as a surprise that no one appears to have defined why the bulges occur along a dyke and whether there are undiscovered ones, yet alone what is thought to be the main feeder for the gold mineralisation. As a general observation most of the bulges appear to be under a hill. The A1 dyke bulge also has bits on its sides that do link to the main bulge, and an offset extension that is not in the line of the main dyke.

It very quickly becomes clear that simply focusing on visible gold in quartz lodes within known dyke bulges appears to have overlooked a number of styles of mineralisation that have simply not been considered to be economic.

When the mines in the area historically closed, it was often due to encountering water at creek level, or the time to mine an adit. The main creek adit at Rose of Denmark for example took almost 10 years over 1880 to 1890 to be developed, and by more than one company or syndicate. Also, in the early 1900s mines closed because they were uneconomic as in the cut-off break even grade at Morning Star was 18g/t, and at A1 it was an even higher 22g/t. There is more than one historical remark at how poor the grade was at 0.5oz/t (~16g/t), and hence a mine closed.

So aside from visible gold in quartz in dyke bulges, what else is there that does not appear to have been looked at or considered ?

Well, there are the mutton fat grade ores. Mutton fat refers to blobby white fat, and when applied to describe quartz, it referred to the degenerated or oxidised quartz often adjacent to or before a vein and was usually ignored because its grade was too low at 3g/t to 10g/t or higher.

Then there are the dykes themselves outside of the bulges, and whether adjacent dykes in the swarm have been considered. There are also references to cross-cuts to parallel dykes, but there seems to have been little lateral / horizontal drilling checking for such structures.

Plus there is the sandstone. On a recent visit with MNM to the Hunts mining area (south of Gaffney's) we noticed an old shaft that seemed to have been mining sandstone, not dyke material. This was an extension of a NE/SW open-cut that had NW/SE striking quartz veins often cutting across or between sediments such as sandstone. And underground at Morning Star in the old workings some of the stopes were clearly mining sandstone (or veins in the sandstone). A trawl through some historical records such as the "Gold at Gaffney's Creek" book has more than one reference to mining gold in quartz in sandstone - which has clearly become forgotten.

And there is the NE/SW open-cut clearly showing that something was being materially mined in a NE/SW direction, compared to the main NW/SE striking dyke swarm. Further north there is the old 3 compartment NE/SW striking Dempsey shaft that was sunk in the creek because the vg in quartz lode was exposed in the creek (which is more of a fast flowing creek/river). That is about it as far as the NE/SW direction has been considered, other than E/W striking quartz lodes that can be seen in the A1 gold mine, otherwise there are no references to possible E/W mineralisation in the goldfield.

There also appears to be a number of overlooked structures with valleys possibly linking with dykes - Google Earth was not available, yet alone freely available many years ago and hence possible extensions to the dykes would probably not have been considered.

Clearly despite its 150 year history, many potentially economic aspects of gold mineralisation do not appear to have been contemplated in the Woods Point area, so Woods Point could actually revive and not be reliant solely on the dyke bulges, while a better understanding of controls on the mineralisation in the bulges themselves may also be successful.

Tarring Woods Point as Walhalla could prove to be very misleading. Sometimes all that is needed is a fresh outlook, as has been seen in Newmarket's discovery at depth at Fosterville (referred to in the previous issue of Paydirt).

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 Taylor Collison Ltd (AFSL 247083).

Figure. The Morning Star Dyke Bulge in 3d Leapfrog, and some underground views