The ‘Once-in-a-Decade’ Discovery – Victorian Gold Rush Renaissance
Perhaps the ‘COVID safe’ changes are all right after all.
Don’t get me wrong, I’m completely over hearing the words ‘COVID safe’ at venues.
But I discovered that perhaps there are perks to companies with a ‘COVID safe plan’.
For example, yesterday I was at the Melbourne Mining Club lunch — the first one for over a year. And when they served up dessert, dessert was a cheese platter all to myself.
In years gone by a table would be dished up with communal cheese.
Not having to share cheese is perhaps one of life’s little wins.
The big win though, was listening to what Victorian gold miners and explorers were up to…
398 days between drinks
Way back in February 2020, the Melbourne Mining Club got together to do what they normally do, that is have lunch and talk about big holes. Or soon to be big holes. Or where little holes will be dug with the hope that one day, they would become big holes. And most importantly, where would these companies find the money to dig said holes…
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When the crowd of 200 or so shuffled out of the Melbourne Town Hall in early February last year, you can safely bet no one knew that it would be another 398 days before they’d met again.
Being the first meeting in well over a year, the room was positively optimistic.
I was a guest of NWR Communications. Which meant I ended up a on table full of gold explorers. It was a little bit like Christmas coming all at once. A table full of gold explorers with exciting programs underway and a cheese platter I didn’t have to share…
But the 114th Melbourne Mining Club kicked off with a purpose. The topic for the day was ‘Victoria’ and all the possible gold that may lay beneath the ground.
Estimates from the Victorian government vary, but it’s tipped that anywhere between 30 and 80 million ounces of gold may still be hiding in Victoria’s gold fields.
Depending on how many years you’ve been reading these pages, it should come as no surprise to you that I’m passionate about a booming gold sector in Victoria. In fact, I’ve been calling the gold exploration moves ‘The Victorian Gold Rush Renaissance’ since 2018.
And to be frank, this renaissance really began with a little old mine called Fosterville.
The tale of Fosterville is splendid.
It was a high-cost, low-grade producer for many years. The asset had been passed around from owner to owner since the late 1980s. And the processing method wasn’t really suited to Fosterville’s ore body.
No one had really worked out what to do with it. Victorian mining regulations weren’t exactly ‘mining friendly’ over this time either.
It was thought to be a dud. An expensive asset that needed to be shelved…
But somewhere around 2013–14 a bunch of Canadians took an interest in little old Fosterville.
They rustled up some international money — no one in Australia in their right mind would fund that project — and started sinking some holes in the ground.
A handful of samples brought encouraged international investors to plough more money into the site….
…which some deep diamond drilling all the way down to 1,000m revealed what we now call the ‘Swan Zone’.
Or in North American markets, ‘the jewellery box’.
What was almost a joke asset has morphed into a ‘once-in-a-decade’ find.
Fosterville mine went from producing 100,000 ounces a year to a whopping 600,000 ounces a year in 2020.
And with it, it breathed fresh life into the Victorian gold mining industry…
The Victorian Gold Rush Renaissance
Which brings me back to the topic on the table yesterday at the MMC.
One of the presenters noted that throughout 2020 alone, more than $200 million in capital was raised for Victorian companies.
In other words, throughout a pandemic — a time when Victoria had the harshest restrictions of anywhere in Australia — institutional investors were still very interested in the gold potential in Victoria.
The same presenter pointed out that he had brokers calling from all over the world offering large sums of money for a stake in any gold explorer in Victoria. Brokers were no longer being picky. They just wanted a chance…
Not only that, but since Fosterville went and upped the stakes for Victorian gold mines, many North American companies had picked up ground in Victoria. In particular, as close to the Fosterville mine as they could get.
You know why?
Everyone wants to ‘do a Fosterville’.
If you like surprises, keep your eyes on Victoria’s historic gold fields. There’s an awful lot of institutional money poking around out there hoping to find their own ‘once-in-a-decade’ find.
Until next time,
Editor, The Daily Reckoning Australia
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