Astral Resources NL (ASX: AAR) is a dynamic gold exploration company situated in the heart of the Goldfields Kalgoorlie region of Western Australia. At the forefront of its portfolio is the Mandilla Gold Project, strategically positioned and supported by a profitable scoping study completed to a high level of technical detail. Astral is committed to becoming the Kalgoorlie region’s next 100,000 ounces per annum gold producer; following the recent capital raise, the Company is now well capitalised to complete the necessary technical studies while maintaining an aggressive exploration program aimed at unlocking further gold potential at its Mandilla and Feysville Gold Projects.
Figure 1: Astral Resources’ Projects
Mandilla Gold Project: Cornerstone Asset Nearing Key Milestones
Mandilla Gold Project is located approximately 70 kilometres south of Kalgoorlie. Gold mineralisation at Theia and Iris comprises structurally controlled quartz vein arrays and hydrothermal alteration. The Scoping Study (published September 2023) confirmed the potential for Astral’s flagship Mandilla Gold Project to become a highly profitable standalone gold operation.
The Mineral Resource Estimate (MRE) for the Mandilla Gold Project is 1.265 million ounces of gold. The project is in the Spargoville Shear Zone, a prominent geological structure renowned for its gold production capabilities.
Astral recently completed a 70-hole, 6,512-metre in-fill RC drill programme at the pivotal Theia deposit that accounts for most of the resources. The assay results from this drilling campaign reported post-quarter on October 9th, 2024, confirmed multiple high-grade mineralisation zones, extending the known deposit.
Figure 2: MRE For Mandilla Gold Project
Metallurgical test results from Mandilla’s Hestia, Eos, and Iris deposits have demonstrated exceptionally high gold recoveries of up to 99.5%, complemented by fast leach kinetics and low reagent consumption. These results position Mandilla as a potentially low-cost operation, key factors enhancing profitability as the Company progresses toward the Pre-Feasibility Study (PFS).
The scoping study highlights that the project has 100,000 ounces per annum production with 7.8 mining years and 10.4 years of processing capability. The project has AISC A$ 1,648/oz over LOM with robust financials like NPV8 of $442 million, FCF of $740 million, and a 9-month payback.
At a spot gold price in excess of AUD$ 4,100. The financials look even more impressive, with an NPV8 of $1.2B and FCF of $1.8B!
Timeline for the project:
– 2024: Assay results and completion of RC drilling at Theia deposits
– Pre-Feasibility Study (PFS): Anticipated in the June Quarter 2025
– Definitive Feasibility Study (DFS): Scheduled for completion in the first half of calendar year 2026
Feysville Gold Project: Building a Solid Resource Base
The Feysville Gold Project, located south of Kalgoorlie, is emerging as a primary exploration focus for Astral. Recent drilling at the Rogan Josh and Kamperman prospects has yielded promising results. The Company completed 32 holes over 1,673 metres of RC drilling and 120 holes over 3,664 metres of reconnaissance air-core (AC) drilling in the previous quarter. The results are now being incorporated into a Maiden Mineral Resource Estimate (MRE) for Feysville, expected to be reported in October 2024.
Notably, assay results received for the first 20 holes (2,580 metres) of a 31-hole (3,834-metre) RC drill programme at the Kamperman Prospect included impressive intersections, such as 12 metres at 7.26 g/t Au from 23 metres, which featured 1 metre at 39.7 g/t Au from 27 metres. Further down-hole, an outstanding 25 metres at 24.3 g/t Au from 68 metres was recorded, with notable high-grade intervals, underscoring the potential of this prospect.
Figure 3: Feysville Gold Project showing tenements and deposit prospects on local area geology
Timeline for the project:
– October 2024: Maiden Mineral Resource Estimate (MRE) for Rogan Josh and Kamperman
– Exploration: Ongoing drilling to expand the resource base and identify new high-grade zones
Astral Resources’ Managing Director, Marc Ducler, stated, “These latest holes at Kamperman continue to surprise to the upside – showing that there is a potentially very significant high-grade opportunity here that we are yet to unlock.” He noted, “Previously, FRC243 returned a high-grade zone of two metres at 188g/t Au from 77 metres, 40 metres to the north-east. FRC378 has returned another high-grade zone of three metres at 177g/t Au from 74 metres.”
Ducler highlighted that previous diamond drilling aimed at understanding the orientation of this high-grade zone did not yield successful results; however, the potential size of the prize warrants additional work.
“The extensional drilling completed to the north and north-east has continued to intersect gold mineralisation, albeit the gold grades were of a lower tenor than expected given the quantum of quartz and sulphides logged in the RC chips. Additional RC drilling is planned, given the proximity to a northeast-trending fault, potentially controlling or offsetting the mineralisation. It is becoming clear that Kamperman hosts multiple potential controlling structures that warrant further investigation, as does Feysville.”
Ducler updated other drilling programmes: “The in-fill RC programme at Iris is 50% complete. The programme has been on hold for approximately three weeks while groundwater testing is undertaken with the RC rig. Once the groundwater programme is complete, RC drilling will resume at Iris and Eos. Meanwhile, diamond drilling is underway at Theia, and four deep in-fill holes for 1,600 metres are planned. These holes are designed to provide the confidence required to warrant an upgrade of the Inferred Resources at depth into the Indicated Resource category.”
A Position of Balance Sheet Strength
In October 2024, Astral announced a two-tranche placement to raise approximately $25 million (before costs) by issuing approximately 263 million new fully paid shares at an offer price of $0.095. The first tranche raised roughly $21 million and was completed on October 1, 2024, demonstrating strong investor confidence. The second tranche, subject to shareholder approval, is expected to raise an additional $4 million, further solidifying Astral’s strategic financial positioning.
As of September 30th, 2024, the Company reported a cash position of approximately $24.1 million, including Tranche 1 proceeds. A robust cash position helps the company to advance and support its exploration projects.
Assay Results and Metallurgical Studies
Recent assay results from both Mandilla and Feysville have significantly de-risked the projects. At Mandilla, the Theia deposit continues to deliver high-grade intercepts, while metallurgical test work has shown gold recoveries of up to 99.5%, laying a solid foundation for the upcoming PFS.
The Feysville project has also delivered highly encouraging results, with positive assays from the Rogan Josh and Kamperman prospects. Notably, the results from the Kamperman program have shown gold mineralisation to the north, indicating further potential for expansion.
With Mandilla positioned as a low-cost operation with high recovery rates, the feasibility studies will likely confirm its solid economic potential. Meanwhile, Feysville, with its promising exploration results, offers further upside as Astral continues to define its resource base.
Industry Context: Gold’s Resilient Demand
The global gold market remains strong, driven by persistent demand influenced by economic uncertainties and geopolitical tensions. Western Australia, home to several of the world’s largest gold producers, continues to attract significant investment due to its rich mineral endowment and stable regulatory framework. Astral’s strategic location and project portfolio place the Company in an advantageous position to capitalise on the ongoing demand for gold.
Ongoing exploration at Mandilla and Feysville projects aligns with increasing global demand for gold, driven by economic uncertainty and the metal’s role as a safe-haven asset. Astral’s fully funded project pipeline, bolstered by a recent $21 million capital raise, supports aggressive exploration efforts likely to yield continued resource upgrades. The company is poised to deliver long-term shareholder value as Astral progresses with its development plans, including targeting further resource delineation at Kamperman and Iris.
Managing Director’s Vision: Aligns With Company’s Strategic Goals
Figure 6: Mr Marc Ducler, Managing Director
Astral’s Managing Director, Marc Ducler, emphasises the exciting potential within the Company’s projects. He stated, “These latest holes at Kamperman continue to surprise to the upside – showing that there is a potentially very significant high-grade opportunity here that we are yet to unlock.”
The leadership is committed to advancing the Mandilla and Feysville projects toward production, ensuring that critical milestones are met on time and within budget.
Mr Marc Ducler has over 20 years of experience in the mining industry, with the past 17 years spent in senior operational management roles with major companies such as GoldFields, BHP, Fortescue Metals, MRL, and Roy Hill. His most recent position was as Managing Director of Egan Street Resources, a gold exploration and development Company, until its successful takeover by Silver Lake Resources (ASX: SLR).
Investor Outlook
Astral Resources is well-positioned for significant growth as it advances its gold projects, Mandilla and Feysville, within Western Australia’s goldfields. With robust assay results, promising metallurgical studies, and a fully funded exploration programme, Astral is on the path to achieving its strategic objectives. The forthcoming Pre-Feasibility and Definitive Feasibility Studies for Mandilla, alongside the Maiden MRE for Feysville, will be pivotal in determining the Company’s trajectory. Investors can anticipate steady updates as Astral approaches realising its gold production potential.
As of October 24th, 2024, Astral Resources’ shares traded at AUD 0.135 per share, with a 52-week range of AUD 0.051 – AUD 0.140. The Company’s market capitalisation is AUD 162.03 million, with 1,157.398 million shares issued as of the same date.
Astral strategically focuses on enhancing shareholder value through robust exploration and development initiatives. The positive drilling results and forthcoming MREs are expected to stimulate investor interest, marking Astral as a notable player in the gold sector.
