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NEWS

Dual focus is no rare feat

by Michael Washbourne

eeka Gold Ltd chief executive Tim Davidson insists his
Mcompany has the capacity to manage a multitude of projects
across varying stages of development and commodity types
after picking up a 2,000sq km land package in an emerging rare
earths province.
Despite a recent positive scoping study for its Murchison gold
project which includes a restart strategy for the mothballed Andy Meeka has lifted resources at its Murchison project beyond 1.1 moz
Well mine, Meeka surprised the market in February when it
announced plans to explore for rare earths at its newly acquired
that we send to the lab; do we want it assayed for rare earths or
Cascade project in the Albany-Fraser Mobile Belt.
gold or both?”
Meeka had initially looked at the Cascade tenements for gold
It has been a little over 15 months since Meeka (formerly Latitude
exploration targets similar to those at its Circle Valley project,
Consolidated) picked up the Murchison project comprising
about 50km to the east, where drilling has consistently returned
Andy Well and the Turnberry resources previously explored and
encouraging grades and widths.
developed by Doray Minerals prior to the merger with Silver Lake
Cascade is situated to the west of ground controlled by Mount Resources Ltd in late 2018.
Ridley Mines Ltd where recent drilling has returned peak TREO
A scoping study released in December supported total mine
grades of 10,461 ppm over a strike length of more than 25km.
production of 4.9mt @ 2.8 g/t gold for 443,000oz over an eight-
Meeka has made a promising start to its review of the rare earths year mine life, with processing operations running for nine years
potential on its ground in the Albany-Fraser belt. Historical assay to fully deplete stockpiles. Average gold production was estimated
results at Cascade from reconnaissance drilling completed early at 50,000 ozpa, generating pre-tax undiscounted free cash flow
last decade produced grades of up to 2,563 ppm rare earth oxide, of $182 million, based on a $2,400 gold price.
while multiple thick zones of thick ionic absorption clay rare earth
Other key estimates were NPV of $124 million, IRR of 46%,
mineralisation has been identified at Circle Valley.
EBITDA of $457 million and AISC of $1,655/oz for gold sales
Speaking to GMJ in March, Davidson was adamant his company totalling 422,000oz. Pre-production capex is a modest $52 million
could explore for both gold and rare earths across its properties. with a payback of 23 months.
“There’s no reason why we can’t have a drill rig working on PFS work is now under way with the company likely to target
gold targeting and then do some infill drilling with the rare earth a higher production rate, especially on the back of last year’s
mineralisation,” Davidson said. exploration success at St Anne’s which yielded 24m @ 4.81 g/t
“Given the proximity of Circle Valley and Cascade, there’s also no from 68m.
reason why we can’t work on both these projects because it’s not Davidson said restoring the existing processing facilities – Doray
like we’re traveling from the Pilbara to the east coast of Australia; placed operations on care-and-maintenance in mid-2017 –
we’re only 50km away. We can, for want of a better word, multi- remained Meeka’s No.1 priority.
task both from a project perspective at Cascade and Circle Valley,
“We’ve really started to reshape that story – and the story is that
but also from a commodity perspective because drilling is drilling.
there’s still plenty of life left in those assets,” he said. “What we
“The only thing that changes is what we write on the sample sheet demonstrated through the release of the scoping study and what
we’re currently working through with the PFS is these assets are
not done and dusted. There’s a significant mineral endowment,
we’ve got over 1 moz in the ground and we’ve now got a pathway
to economically extract a significant portion of those ounces.
And we’re continuing to have exploration success outside of the
resource.
“As we look to put the Murchison into production and generate
cash flow from that asset, that will give us the financial
horsepower to go and look at other assets which might fit into our
stable. It really has been a transformational change over the last
12 months, we’ve morphed from a company that was a shell into
an operating company that has the capacity to move on things.”
Meeka’s emerging rare earths portfolio near Esperance

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