Lucky strike in outback WA could spark 'mini gold rush' for prospectors and miners
Prospectors and exploration companies seeking to strike it rich have been re-energised by the discovery of rare gold specimens at a mine in outback Western Australia.
Some are saying it could spark a "mini gold rush" for a town down on its luck.
In the days since the spectacular find at Kambalda, 630 kilometres east of Perth, a wave of excitement has washed over the nickel mining town which has been on its knees in recent times.
One exploration company holding ground adjacent to the Beta Hunt mine, where $15 million worth of gold-encrusted rocks were found 500 metres below the surface, has already been inundated with calls.
It is just the tonic for Kambalda — a tight-knit community built on the discovery of Australia's first nickel mine in 1966 — which has been hit by hundreds of job losses with the closure of four major mines in three years.
Town loses GP clinic, bank, petrol station
The mine closures decimated the playing ranks of the Kambalda Football Club, which lost 49 games in a row until breaking a three-year drought in July.
Kambalda residents have also had to deal with the loss of the local doctors' surgery and the town's only bank branch.
Last week Kambalda's only petrol station was closed for four months for renovations, forcing residents to drive 60km to Kalgoorlie-Boulder to fill up.
But the town — population 2,539, according to the last census — finally has some light at the end of the tunnel with news of the major gold discovery.
Discovery lifts veil of 'doom and gloom'
Real estate agent Cheryl Davis, who has lived in Kambalda for more than 25 years, said the discovery had boosted morale in the town.
"We've had a lot of doom and gloom and it's nice to get some positive news and getting people to talk about the good things.
"Everyone's talking about how good this is for our town and that our town isn't going to die. We're looking on the up."
Les Blakey, who has lived in Kambalda for 35 years, said the gold discovery was the talk of the town.
He said that while it was positive, the town would not fully recover until the nickel price rebounded.
"The gold discovery is a one-off thing," he said.
"The town will never die; the gold will keep it going, but the nickel price is what they need."
Bob Fagan from the Eastern Goldfields Prospectors' Association said the discovery was every prospector's dream.
The former WA School of Mines geology lecturer said it could attract more prospectors to the region, as well as mining investment for deeper exploration.
Dr Fagan said the region was already on the map as a world-renowned gold province and discoveries of this nature only reinforced that there was more gold waiting to be found.
"It's very encouraging because it says there's a lot of gold in the system, although this was coming from 500-metres depth," he said.
"This confirms what we already knew — that this is a very gold-rich area.
"It probably will attract more prospectors because we've got a situation where they've dragged out about $3 million worth of gold in half a day.
"The challenge is to find that on the surface [and] it's possible, although that's not very common ... you need to be very lucky."
Fresh optimism puts town in spotlight
Kalgoorlie-based gold buyer Angus Line said the global publicity generated by the Beta Hunt discovery would benefit the region and could spark a "mini gold rush".
"It creates a lot of excitement for the new-age prospector," he said.
"There's going to be a lot more exploration, and small prospectors and leaseholders in the area will be excited because something of this size has only been found a handful of times in the history of gold mining throughout the world.
"Finding something like this does create a lot of optimism; people have the belief they can go out and make a small fortune."
Specimens likely to fetch handsome price
Mr Line said there had been a massive spike in the number of prospectors in recent years because of strong gold prices and the popularity of TV shows like Aussie Gold Hunters.
The Discovery Channel television production follows crews of gold-hungry prospectors as they set out to uncover a fortune on the WA Goldfields, with more than $1.3 million worth of gold unearthed in season three.
Mr Line anticipated the rare specimens from Beta Hunt would fetch a handsome price at auction.
"With these pieces, the actual gold content becomes a bit of an afterthought with the size of them," he said.
"The rarity of finding something this big, you can sort of bargain what you want for them.
"People will pay whatever they are willing to pay for them [and] it can often fetch much more than the gold price.
"They've been broadcasted so far, so there would be a lot of eyes watching them."
Excitement in area mounts
ASX-listed company Lefroy Exploration has found hundreds of gold nuggets over the past five years on its 600-square-kilometre land package, just 10km east of Beta Hunt.
Managing director and veteran geologist Wade Johnson said the Beta Hunt discovery had re-energised explorers in the area and excited potential investors.
He has already received calls asking about available land for exploration near Beta Hunt.
"It's the amount and the size of the find down at Beta Hunt which has got everyone excited and now the question is, how do we find another one?" Mr Johnson said.
"We see a lot of nuggets on our ground and trying to find the source of all the alluvial gold is the challenge.
"It's pretty special, the amount of nuggets we've found on our ground."
Mining giant key to Kambalda's fortunes
The biggest player in the Kambalda gold scene also happens to be Lefroy Exploration's major shareholder, South African mining giant Gold Fields, which holds an 18 per cent stake in the Perth-based explorer.
Gold Fields owns the Beta Hunt mining lease and has produced more than 10 million ounces of gold at its St Ives operations at Kambalda, mining deposits around the Lake Lefroy salt lake for decades.
One of Gold Fields' newest underground mines, named Invincible, runs along the same gold strike as Beta Hunt.
Lefroy Exploration is relatively new to the area, having started drilling in late 2016.
"It's a vast area of land, very prospective for gold and our ground has had very little exploration over the years," Mr Johnson said.
"It's whether we can replicate the success Gold Fields have had at St Ives on the eastern side of Lake Lefroy."
Mine sale put on hold in wake of discovery
The discovery has also prompted the Canadian owners of the Beta Hunt mine to reconsider their decision to sell.
Beta Hunt was last sold for $10 million in 2013 to Australian company Salt Lake Mining, which was taken over by RNC Minerals for about $18.5 million in a cash-and-scrip deal in 2016.
The mine had been on the market for months and Toronto-based RNC Minerals had been in what it called "exclusive discussions with a preferred bidder".
The company is now considering all options, with its latest move an indication they are now looking for a much higher price or a potential joint venture partner.
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