Goldstar Resources NL (GDR) – Reopening Victoria’s Walhalla Goldfield

• The IPO Offer : Goldstar Resources (GDR) offered a subscription of 24m shares at 25c to raise $6m (minimum subscription $5m, sponsored by Southern Cross Equities) primarily to re-open the old Walhalla Goldfield in Eastern Victoria. GDR aims to establish an ~1moz resource at Walhalla, an up to 0.5moz resource at its Peak Hill prospect and evaluate at least three other prospects in Australia which have been previously explored but could be re-interpreted.
• The main focus at Walhalla are the Cohen’s and Empress Reefs which lie along a 1.5km strike length of the delineated 4km long Cohen’s Line of Reef at Walhalla. The Cohen’s reef is not like the more common Victorian styles of gold mineralisation west of Melbourne, and instead is located east of Melbourne and is contained within an almost vertical shear zone.
• Historic grades in the Cohen’s Reef were exceptionally high being up to 6oz/t or 190g/t over an average width of 45cm and strike lengths of 18m ahead of the mine closure in 1913 due to pumping and ventilation at depths >1km. Almost 1.5moz was extracted at an average grade of 1oz/t or 33g/t over the 1.5km strike length of workings.
• Recoveries of up to 95% have been attained from gravity concentration testwork of the stockwork ore undertaken in the early 1990’s, which is in contrast to the market’s perception that Walhalla’s ore is refractory. The main Cohen reef historically attained recoveries of 85% to 90% (using stamp batteries). The misperception arose due to a pre-feasibility study of the stockwork resource in 1987 that attained low recoveries because it only considered direct cyanidation.
• The exploration focus at Walhalla is on three styles of mineralisation, being the stockwork resource over the old Cohen’s reef workings, three possible extensions to the Empress lode system, and extensions to the Cohen’s reef that are greater than 5g/t. Extensions appear to be very possible, given that cut-off grades of up to 18g/t together with perhaps 3 to 8 g/t losses in tailings, infers that somehistorically classified “unpay” areas could be >10g/t.