Nov 18, 2024

Warriedar Resources Doubles Ricciardo Gold Resource to 947,500 Ounces

Key Take Away:

West Australian gold explorer Warriedar Resources (ASX: WA8) (Market Cap: $32M | Last Close: $0.042 | Cash: $6.2M ) has announced a significant expansion of its Ricciardo gold deposit, doubling the resource to 947,500 ounces at a grade of 1.8 grams per tonne gold. The company achieved this substantial increase through targeted drilling that cost only A$16 per ounce to discover, with substantial upside growth potential.

Resource Details

Warriedar Resources (ASX:WA8) has revealed updated figures for its flagship Ricciardo Gold Deposit in Western Australia's Murchison region, showcasing a 99% increase in contained gold ounces. The new resource consists of two parts: 467,500 ounces suitable for open-pit mining and 480,000 ounces for potential underground development.

Recent Drilling Success

The resource upgrade follows impressive drilling results from the company's first diamond drilling program in 10 years, which included standout intersections such as 19 meters at 4.94 grams per tonne gold and 12 meters at 6.98 grams per tonne gold. These results helped demonstrate the continuity of high-grade mineralization at depth, supporting the significant resource increase.

High Confidence Classification

The resource upgrade carries extra weight as 75% of the open-pit portion falls into the higher-confidence Measured and Indicated categories, which are important classifications that give investors more certainty about the deposit's characteristics. This high confidence level was supported by systematic drilling across the 2.3-kilometer strike length of the deposit.

Management Commentary

Warriedar Managing Director and CEO, Amanda Buckingham, commented:

“This is the result we have been working towards all year. With less than 15,000m of targeted, efficient drilling we have added over 470 koz to the Ricciardo deposit, doubling the Resource."

"We are excited by both the outcome itself, and the outlook that it delivers us for the wider corridor of gold deposits. The simple strategy of drilling below shallow open pits to find mineable ounces worked exceptionally well for our producing neighbours. The validity of this strategy is now beyond doubt, for us."

"Not only is the Ricciardo system still wide open down-plunge, but the entire 25km long ‘Golden Corridor’ offers similar potential upside from such a relatively simple drilling focus."

"In the middle of the infrastructure-rich southern Murchison, and located on existing Mining Leases, the opportunity in front of us is utterly irresistible.”

Growth Potential

The deposit remains open for expansion, particularly at depth and along strike, suggesting potential for further growth. The company is currently conducting additional drilling at the southern end of what it calls the 'Golden Corridor,' with results pending from nine completed holes. Previous drilling has shown the system remains largely untested below 100 meters depth.

Antimony Bonus

An interesting bonus for investors is the presence of antimony in the deposit, a critical mineral that has seen its price triple from US$12,000 to US$37,700 per tonne. While gold remains the primary focus, the antimony content could add significant value to the project in the future.

Gold Market Outlook

Gold continues to play a crucial role in the global financial system as a store of value and hedge against inflation. With the precious metal recently surpassing US$2,500 per ounce, reaching record highs, the timing of Warriedar's resource upgrade appears favourable. The company's growing resource base positions it as an emerging player to note in the Australian gold sector.

Financial Position

The company is well-funded with A$6.2 million in cash as of September 2024 and carries no debt. With a current market capitalization of A$32 million, Warriedar trades at an implied value of about A$34 per resource ounce, which is relatively low compared to many peers in the Australian gold sector.

Strategic Location and Infrastructure

The resource upgrade at Ricciardo adds to Warriedar's total resource base of over 2.3 million ounces across its Western Australian and Nevada projects. Located in the infrastructure-rich southern Murchison region and situated on existing mining leases, the project benefits from its proximity to multiple processing facilities, including the company's own plant 8 kilometers away, which could reduce future development costs. The project's location in an established mining region provides significant operational advantages for future development.

Sources:

WA8 ASX Announcement

Additional Figures:

ASX

Australia

Gold

Nov 18, 2024