Can Murchison South’s Free-Milling Ore Unlock Toll Milling Opportunities?

Metallurgical Breakthrough at Murchison South

Reach Resources Limited (ASX, RR1) has delivered a promising update on its Murchison South Gold Project, revealing metallurgical testwork that indicates the ore is highly amenable to conventional processing methods. The company reported gold recoveries ranging from 95.2% to 97.4% using a gravity and cyanide leach flowsheet, a result that underscores the potential for efficient extraction of gold from the deposit.

The testwork was comprehensive, involving samples from oxide, transitional, and fresh mineralisation zones. Importantly, the tests were conducted under conditions that closely mimic those at nearby toll milling and ore purchase facilities, including the use of representative site water. This approach lends credibility to the results and suggests that Reach Resources could leverage existing infrastructure to process ore cost-effectively.

Ore Characteristics and Processing Advantages

The metallurgical program, managed by JT Metallurgical Services and conducted at Bureau Veritas and Auralia Metallurgical Labs, confirmed that the Murchison South ore is free-milling and relatively soft. These characteristics are favourable for processing, as they imply lower energy requirements for grinding and milling. The ore also demonstrated minimal sensitivity to grind size above P80 150 microns, which could translate into operational efficiencies and higher throughput.

Additional tests showed low lime and cyanide consumption, which are critical factors in controlling processing costs and environmental impact. The absence of significant deleterious elements further reduces potential complications during processing. Rheological assessments indicated that the ore slurries pose no significant challenges for pumping and handling, except for some additional water requirements for weathered oxide ores.

Supporting Environmental and Operational Considerations

Environmental testing revealed that residues from the leach process are non-acid forming, mitigating concerns about acid mine drainage, a common environmental risk in gold mining. This finding supports the project's sustainability credentials and regulatory compliance prospects.

Reach Resources’ CEO, Jeremy Bower, emphasised the significance of these results, noting that the high gold recoveries and favourable ore characteristics provide strong technical support for exploring processing options, including toll milling arrangements. This strategy could reduce capital expenditure and accelerate the path to production.

Next Steps and Market Implications

The company is progressing a scoping study to further evaluate the economic and technical viability of the project, although no conclusions have yet been drawn. The metallurgical results, however, lay a solid foundation for this work and suggest that Murchison South could become a competitive gold producer leveraging existing regional processing infrastructure.

Investors and analysts will be watching closely for upcoming drilling results and the scoping study outcomes, which will provide greater clarity on the project’s potential scale and timeline.