Kalamazoo Faces Key Ashburton Option Deadline Amid Market and Exploration Risks
Kalamazoo Resources reports robust assay results from its Ashburton Gold Project and secures $1.13 million in capital to fuel ongoing exploration across Western Australia and Victoria.
- De Grey Mining extends option to acquire Ashburton Gold Project until August 2025
- Exceptional assay results from 10-hole metallurgical drilling program at Ashburton
- Successful $1.13 million capital raise via Share Purchase Plan and placement
- Mallina West drilling completed with results pending, supported by WA Government grant
- Ongoing exploration at Victorian projects including Mt Piper and South Muckleford
Ashburton Gold Project: Progress and Potential
Kalamazoo Resources Limited (ASX: KZR) has reported significant progress in its flagship Ashburton Gold Project (AGP) located in Western Australia. The 1.44 million ounce gold project is currently under an Option to Acquire Agreement with De Grey Mining Limited (ASX: DEG), which has been extended to 4 August 2025. This extension allows De Grey additional time to complete metallurgical test work and integrate assay results into resource modelling and optimisation studies.
During the December quarter, De Grey completed a 10-hole metallurgical drilling program totaling 2,252.3 metres, yielding impressive assay results including intercepts such as 47.0 metres at 5.5 grams per tonne (g/t) gold from 30 metres depth, and 55.5 metres at 4.1 g/t from 177.6 metres. These results underscore the high-grade nature of the Mt Olympus resource within the AGP and enhance the project's attractiveness ahead of a potential $30 million acquisition by De Grey.
Capital Raise Fuels Exploration Momentum
Kalamazoo successfully closed a Share Purchase Plan (SPP) and placement in October 2024, raising a combined $1.13 million at $0.08 per share. The funds are earmarked to support ongoing drilling at the Mallina West Gold Project, further investigations at the South Muckleford Gold/Antimony Project in Victoria, and exploration activities at the Mt Piper Gold Project. Additionally, the capital will assist De Grey’s due diligence efforts at Ashburton and provide general working capital.
Exploration Advances at Mallina West and Victorian Projects
The Mallina West Gold Project in the Pilbara region saw a follow-up drilling program completed in late 2024, targeting a compelling 3D magnetic anomaly associated with a diorite intrusion at the Wattle Plains Prospect. This target is analogous to the nearby world-class Hemi gold discovery by De Grey. Results from the RC and diamond drilling are awaited in the coming quarter. Notably, Kalamazoo secured a Western Australian Government Exploration Incentive Scheme grant to co-fund this drilling, highlighting the project's regional significance.
In Victoria, Kalamazoo continues to advance its portfolio, including the Mt Piper Gold Project near the world-renowned Fosterville mine. Field reconnaissance and sampling activities are ongoing, with results pending. The South Muckleford Project is under review for its gold-antimony mineralisation potential, drawing parallels to high-grade deposits such as Fosterville and Costerfield. These Victorian assets position Kalamazoo well within a prolific gold and antimony province.
Corporate and Financial Overview
As at 31 December 2024, Kalamazoo held cash reserves of approximately $0.75 million and a market capitalisation of around A$16 million. The company maintains a strong share structure with over 205 million shares on issue. The recent capital raise and ongoing exploration programs reflect a disciplined approach to advancing value while managing expenditure, with $168,000 spent on exploration and $449,000 on corporate activities during the quarter.
Additionally, the Australian Taxation Office issued a Class Ruling clarifying the tax implications of Kalamazoo’s in-specie distribution of Kali Metals Limited shares to shareholders, providing important guidance for investors.
Looking ahead, the market will be watching closely as De Grey progresses its due diligence and potentially exercises its option to acquire the Ashburton Gold Project, a move that could significantly reshape Kalamazoo’s asset portfolio and unlock shareholder value.
Bottom Line?
Kalamazoo’s solid drilling results and strategic funding set the stage for a pivotal year, with the Ashburton acquisition decision looming.
Questions in the middle?
- Will De Grey exercise its option to acquire the Ashburton Gold Project before August 2025?
- What will the upcoming assay results from Mallina West reveal about its gold potential?
- How will the Northern Star acquisition of De Grey impact Kalamazoo’s projects and partnerships?