The historic First Hit gold project, located approximately 150 km Northwest of Western Australia’s famous mining town Kalgoorlie, was most recently mined by Barra Resources in 2001 after they identified high-grade potential within the prospective Ida and Zuleika Shear zones, which are host to many significant gold deposits in the Eastern Goldfields. The former operators mined around 30,000 ounces of gold at ~7.7 g/t, but production from the project proved to be short-lived as Barra curtailed the mine just a year later due to depressed gold prices of around US$320 per ounce in 2002. As a result, the project – which was first discovered back in the 1920s – has remained dormant throughout the last two decades under somewhat ambivalent ownership. That was until ASX-listed explorer Viking Mines acquired the First Hit project in January 2021 via an all-share takeover of Red Dirt Mining and immediately started a first phase drilling campaign that would help bring the historic mine back to life. “On completion of the process we got out on the ground and started drilling very quickly,” says Viking’s CEO Julian Woodcock. “Within three weeks we had a diamond drill rig turning on the property. A few weeks after that we got an air core (AC) rig out.”
A Viking down under
Viking’s ability to mobilise drill rigs at great speed was due in in no small part to the Tier 1 quality of the jurisdiction in which the project is located in. “I’m a bit biased but WA is probably the best jurisdiction in the world to be operating in,” Woodcock tells RGN’s editor.
“We’ve got a very stable government, a well understood and respected mining legislation. WA is very focused on the resources sector; it’s a huge driver of GDP for the state and a significant contributor to Australia as a whole. For Viking, we know the rules in which we are operating.”
Having worked in WA for over a decade spanning previous roles with three well-known mining companies, Woodcock is completely comfortable with the mining laws and all aspects relating to Viking’s tenements, all of which have secure mining licences granted on a long-term basis.
Woodcock was brought in as CEO of Viking in January of this year and was appointed managing director in April after long-serving board member Charles Thomas confirmed his resignation. Thomas had played an instrumental role in the acquisition of the First Hit project and was very involved in the company’s ASX-related activities, before deciding that the time was right to step away.
Meet the team
A close-knit corporate team has supported Woodcock’s acclimatisation into the business, including distinguished lawyer Ray Whitten (AM), highly experienced corporate advisor and geologist Michael Cox and dependable company secretary Dean Jagger.
The recovery of a US$5 million payment yet to be made relating to a divestment Viking made in Ghana some years back continues to be a key undertaking for the board, alongside the drilling campaigns at First Hit. Woodcock assures that he and his colleagues are eagerly pursuing the matter and expect a resolution in the near feature with a judgment hearing date set for July 28th.
“We’ve got a wide range of skillsets within the management team that covers off the legal, financial, accounting and technical. My experience has been working with gold projects for nearly 20 years, and I’ve spent the last 10 years in Australia.
“During that time I’ve been with Gold Fields, Evolution Mining and more recently Gold Road Resources. In those three companies I’ve worked with very large exploration teams and been privileged to be involved with the discovery and growth of several significant resource projects.”
In his latest endeavour, Woodcock is aiming to expand on the gold resource identified and mined by Barra at the turn of the century, only his team are armed with modern exploration techniques and a significant catalogue of data left behind by the former operators of the First Hit mine.
A sleuthing exercise
Barra drilled nearly 130 reverse circulation (RC) holes and three diamond drill (DD) holes, defining an initial resource under the JORC 99 code at the time. Viking has been afforded access to all of the data relating to this activity, including underground development plans and geological information.
“They developed about 1.5 km of decline over 200 vertical metres and 1.7 km of cross cuts and ore drives along the ore on 20 metre spaced levels and then stopped out part of the orebody. We recently managed to get hold of the geological maps of the underground workings which have been very useful in building our understanding of First Hit. It’s been a bit of a sleuthing exercise. We find information then look to assimilate it and bring that into our exploration process,” Woodcock explains.
This valuable existing data provided an effective segue into Viking’s Phase 1 drilling campaign at First Hit, which commenced in February with a 2,500 metres DD campaign followed by 5,080 metres of AC drilling.
“From the DD, we’re gaining new insights into where the mineralisation is occurring underground. That in turn is going to help us find extensions from the known mineralisation, and help us look for new shoots as part of our regional AC programme.”
Going to market
On the back of encouraging observations in the drill core, Viking sought to raise capital from the investor market to ensure a seamless transition to the Phase 2 campaign. In April 2021, the company confirmed that it was oversubscribed for a total sum of A$4 million.
“We wanted to keep the diamond rig turning on site, as we were encouraged by what we’d seen in the drill holes so far and wanted to continue to step out and look for additional shoots. That funding has allowed us to continue the activity without having to pause while waiting for results to come through, so we can maintain momentum.”
Viking’s Phase 2 DD campaign began in earnest following the successful capital raise, with the exercise intended to test for extensions around the old mine workings while looking for mineralisation in material left behind by the former operators in the early 2000s. In addition, the company is testing deeper down below the known limits of mineralisation and also along strike of the existing resource.
The company identified some old prospectors’ workings along strike to the North and South that would’ve been mined up to as far back as 100 years ago. They haven’t been tested effectively, according to Woodcock.
In mid-June, Viking announced it had completed its DD campaign, which encompassed 19 drill holes for a combined total of 3,924 metres in the phases 1 and 2. On completion of sampling from the final batch of diamond core, a total of 967 samples will have been submitted to the MinAnalytical laboratory in Kalgoorlie for analysis.
Viking is also planning the next round of drilling to follow up from the AC programme. When the results are returned from the lab, the company expects to be able to define the corridors within which the shear structures that host the gold occur.
At that point, it will look to start RC drilling to confirm and identify those shear corridors which essentially are the pathways (or ‘plumbing’, in Woodcock’s words) for where the gold has come into the underground region. Any intersections of additional shoots from the RC drilling will then be followed up with more DD, according to Viking’s CEO.
Overall, Viking is following a tried and trusted method for success in gold project development in WA; targeting extensions of known mineralisation at a high-grade, past producing mine that was shuttered during a low gold price environment.
“There are several underground mines in the region being operated by the likes of St Barbara, Northern Star, Evolution Mining and Ora Banda Mining. They have cash costs that range from A$1000-1,500 range per ounce. That would leave around $1,000 of margin at the current gold price.
“The reason why the opportunity at First Hit is so significant is due to the high grade nature of the vein, with around 7 g/t taken out the ground from the mining 20 years ago. The vein is quite narrow, up to a metre in width and that means there’s a bit of dilution that occurs, but 7 grams out the ground is very high grade.”
Finally, the presence of more than half a dozen active gold processing facilities – some owned by mining companies, others by private toll treating companies – within 150 km of the First Hit project will provide multiple avenues for Viking to monetise any additional mineralisation it discovers at the historic resource.