Exploration company Kalamazoo Resources is gearing up for a significant new drilling campaign at its Ashburton gold project in Western Australia's Pilbara region. The program will focus on testing the down-plunge extensions of known resources and multiple brownfields prospects, marking a key step in the company's strategy to grow its gold inventory.
Drilling to Unlock Underground Potential
The initial phase of work will target areas beneath the designed Mt Olympus open pit shell. Ashburton already hosts a substantial resource of 1.44 million ounces of gold at an average grade of 2.8 grams per tonne. Kalamazoo's new goal is to add more ounces from a proposed underground mining operation sitting below the current open-pit design.
This drilling is the first part of a broader plan to test targets along a seven-kilometre structural corridor. The results are expected to provide crucial data for ongoing mine development studies, including the pre-feasibility study for Mt Olympus.
Growing Resource and Robust Economics
A recent re-optimisation of the underground resource model at Mt Olympus has already increased the inventory to 1.44 million tonnes at 3.76 g/t gold for 174,500 ounces. Furthermore, a newly defined exploration target beneath the proposed pit shell is estimated to contain between 350,000 and 500,000 ounces at 2.0–3.8 g/t.
Kalamazoo's Chief Operating Officer, Dr Luke Mortimer, noted that the higher grades identified in the underground model, averaging around 4 g/t, present an opportunity to upgrade inferred resources into the higher-confidence indicated category.
The company's recent scoping study painted a compelling picture for Mt Olympus. It outlined a potential mine life of 73 months, producing 524,000 ounces at an all-in sustaining cost as low as A$2,183 per ounce. The base case, using a conservative gold price of A$4,500/oz, indicated a pre-tax free cashflow of $747 million, an NPV of $423 million, and an impressive IRR of 47%.
Should the gold price reach A$6,000/oz, the economics become even more striking, with free cashflow potentially soaring to $1.4 billion and the NPV jumping to $842 million.
Regional Exploration and Portfolio Strength
Kalamazoo is not just focusing on Mt Olympus. The company sees significant brownfields potential at nearby deposits like Peake, Zeus, and Waugh, which together hold over 360,000 ounces along the broader corridor. Historical drilling at these sites has returned promising results, including 9 metres at 5.52 g/t gold at Waugh.
Beyond Ashburton, Kalamazoo's portfolio includes the strategically located Mallina West gold project, situated 50km along strike from Northern Star's massive Hemi gold discovery. The company is also reviewing its Victorian gold projects for their potential in gold and the critical metal antimony.
The Ashburton project, with its solid grade and proximity to existing infrastructure, positions Kalamazoo in a resurgent Pilbara gold province, alongside major operations like Capricorn Metals' Karlawinda and Northern Star's Hemi. With a clear path to growth and robust project economics, Kalamazoo's latest drilling campaign is set to capture significant market attention.
