Lunnon Metals Tastes Gold Success At Foster-Baker in Eastern Goldfields

Lunnon Metals Ltd (ASX: LM8) has intersected high-grade gold in first-pass drilling at the Foster-Baker project in the Eastern Goldfields near major gold mines.

While Lunnon has progressed the Baker nickel deposit from discovery to Ore Reserves in under 18 months, the gold hits provide a further lucrative string to the bow at the Kambalda Nickel Project.

With a nearby gold plant owned by its major shareholder, St Ives that has potential spare capacity, early cash flow is a distinct possibility.

Best gold assay results include 6 metres at 3.02g/t gold from 64 metres; 2 metres at 24.49g/t gold from 82 metres; and 3 metres at 4.78g/t gold from 62 metres.

The gold prospects in the Foster area are all hosted on granted mining leases.

Lunnon is the only ASX-listed Kambalda explorer/developer.

The Lunnon’s tenements sit between two of St Ives’ great gold mining areas, Victory-Defiance and Argo-Hamlet-Athena, providing the company with a standout opportunity.

The host rocks and the structural setting are analogous to the nearby gold deposits.

The project is broadly surrounded by tenements held by shareholder St Ives Gold Mining Co. Pty Ltd (SIGM), a wholly-owned subsidiary of Gold Fields Limited (JSE: GFI).

The St Ives Gold Mine was sold by WMC to Gold Fields in December 2001 after producing 5.6 million ounces of gold.

This supports Lunnon’s premise that its tenements can deliver near-surface gold mineralisation suitable for open-pit mining in the near term.

The size and scale of the discovery will be fully evaluated after mining, particularly at depth.

The Kambalda Nickel District has produced over 1.6 million tonnes of nickel metal since its discovery in 1966 and over 15 million ounces of gold in total has been mined.

Forward steps

Results are still pending for first-pass gold exploration drilling at prospects Thelma, Lady Herial, and Hustlers in addition to DD and RC results at Paringa West.

There is a natural pause in the surface nickel program while results are received from the Preliminary Feasibility Study for Foster and Baker.

Enterprise Value

Lunnon has a strong balance sheet with $27 million in cash and an EV of about $27.5M.




Articles of Interest