There is a bit of a buzz surrounding a little thing called Aruma Resources (AAJ), a hardy gold explorer with a technical bent.
Its doggedness in looking for sediment-hosted gold to the east of Kalgoorlie – based on some high technology work involving the sample of gases from black shales and analogy comparisons with Gold Fields’ 2Moz-plus Invincible discovery at Kambalda – has piqued interest in its Slate Dam project.
Aruma has not found another Invincible, as its modest $11m market cap (2.1c a share) tells you. But recent drilling has given the explorer its long sought-after “wow” moment.
The company’s maiden drilling program at Slate Dam, 40km east of Kalgoorlie, defined what the company itself has described as a “large scale gold system.”
The drilling defined two 500m-long gold shoots (20m thick and extending from surface to about 200m deep and dipping at 30 degrees) which are split down the middle by a fault. When historic drill results are overlaid with results from Aruma’s work, all the boxes for its sediment-hosted theory are ticked.
That’s been good enough for some smart money, mainly out of Melbourne, to kick in $1m at 2c a share in a placement so Aruma can get aggressive with further drilling.
That the share price has not exactly taken off reflects the low-grade of the two shoots of about 1g/tonne gold. But there are plenty of examples out there of companies making good money from shallow dipping orebodies of similar grade and many of them aren’t on Kalgoorlie’s doorstep either.
It’s early days at Slate Dam but a push to outline an initial resource of 15mt grading 1/tonne for close to 500,000 ozs now seems likely. That would be enough for a standalone 3mtpa plant producing close to 100,000oz at a cash cost in that part of the world of say $A1,100/oz.
At current spot prices of $A1,700/oz, there is plenty of incentive for Aruma to get cracking. And it is, with funds from the placement and an equity-for-drilling deal giving it the wherewithal to hit its Slate Dam ground hard in the next six months.
Aruma reckons it is on the cusp of something quite special out east of Kalgoorlie, and possibly elsewhere in the Eastern goldfields, given the sheer extent of the shales in region. (The gold is ultra- fine so was invisible to the oldtimers, even if they could smell it).
Plus, Victorian gold specialist Navarre looks cheap against its peers with drilling results pending. Read more +
