This is an update report since our first report on Kalamazoo Resources Ltd (KZR) at 12.5c (up >6x) in April 2019, based on historic available info (as a site visit is not possible due to Covid19, being based in NSW). In June 2020, KZR acquired NST’s Ashburton Project ~50km SE of Paraburdoo in WA with $5M payable on treating 250kt, and a 2%NSR on the first 250kozAu, followed by an 0.75%NSR (plus there is a pre-existing 1.75% gold production royalty after 250koz). Following a review of the available data, in ERA’s view KZR’s Ashburton Project alone has the potential to be worth > ~A$100M to A$300M (~A$0.75 to $2.30 per KZR share).

Other Key Points: :

• Northern Star (NST) executed an option in Feb 2011 and acquired Sipa’s complete Ashburton Project of 0.7Moz [incl tenements west of Paulsens] for a 1.75% gold production royalty and ~$0.5k. NST quickly recognised that the Ashburton had been under-drilled and increased the resources to 1.7Moz by Feb 2013 focusing on Mt Olympus and Peake prospects, extending Mt Olympus SE with intersections such as 56m @ 4.2g/t (incl 15m @ 10.4g/t), 76m @ 3.4g/t (incl 30m @ 5.3g/t), etc.
• NST expected to produce 100kozpa from the Ashburton as its second operation, initially in oxide (7.4Mt @ 2.7g/t for 647koz), followed by a plant conversion to probably POX (pressure oxidation) to treat the refractory sulphide (13.9Mt @ 2.3g/t for 1.02Moz). However, lower gold prices caused a rethink in 2013 to focus on near surface prospects for a 100kozpa 5-year, oxide operation.
• However in December 2013, NST was able to achieve 200kozpa by spending only $25M to acquire the Plutonic gold mine from Barrick, placing the Ashburton Project on the back burner. This was followed in Jan 2014 by spending $75M to acquire 51% of the EKJV & 100% of KB from Barrick, elevating NST to 350kozpa, and the Ashburton and its own plant was no longer needed/required.
• The main Ashburton prospects shown in Figure 1b appear to have been based on broad spaced soil geochem as shown in Figure 14a. The under-drilling appears to have been due to an acrimonious JV between Sipa who owned the tenements and Lynas who owned the plant. Such that Lynas were restricted to treating the oxide through the plant with most of the prospects contained in the PGP (Paraburdoo Gold Project of Figure 6a), plus Waugh and Peake.
• However, Lynas were only allowed to treat Waugh and Peake after all the oxide at Mt Olympus had been treated, so Sipa only explored the high grade Waugh after Lynas sold out, and made those bonanza intercepts of 9m @ 53g/t (incl 3m @ 189g/t), 20m @ 18.8g/t (incl 3m @ 96g/t) & 19m @ 15.8g/t (incl 5m @ 47g/t), with those initial high open-cut grades of 13kt @ 18.5g/t.
• But Sipa had put in a perceived oxide depth limit at Waugh of the 400RL, below that it was owned 70% by Newcrest (NCM) due to a farm-in, so the high grade pit stopped at the 400RL (and both Waugh and Peake may have been limited on strike too). Everything outside the PGP was owned 70% by NCM, and poorly explored because NCM thought the targets were too small. NCM was more interested in targets up to ~180km NW on strike, to just beyond Paulsens.