Speaking at the Resources Rising Stars Gather Round Conference in Adelaide last week, Great Boulder managing director Andrew Paterson said he believed the company was undervalued given what it already had, as well as the potential of its assets.

Great Boulder’s main asset is the Side Well gold project near Meekatharra, which has a resource of 668,000 ounces of gold at 2.8 grams per tonne gold.

The indicated and inferred resource includes a high-grade core of 496,000oz at 5.3g/t gold.

Paterson said the company was targeting at least 1.5 million ounces at Side Well.

The company has two main target areas, the Central Corridor, which is a large, high-grade intrusive-related gold system, and the plus-22km-long Eastern Corridor, which is the stratigraphic equivalent of the Paddy’s Flat group of mines.

The Central Corridor hosts the Mulga Bill discovery, which has a resource of 568,000oz at 2.7g/t gold over a 1.1km strike length.

Recent drilling to the north has intersected similar high-grade structures as seen at Mulga Bill at a target called Eaglehawk, which Paterson said looked like it could be the same size or potentially bigger.

The combined Mulga Bill-Eaglehawk system has a strike length of more than 2.5km with Great Boulder yet to define the northern limit of the mineralisation.

“It could easily extend well to the north and that becomes a very large target,” Paterson said. “We could end up with a single open pit here 2-3km long with over 1 million ounces in it and some extremely high grades.”

Most of the drilling at Mulga Bill has been reasonably shallow and the deposit remains open at depth.

“There’s a lot more drilling to do there. A lot of that drilling is shallow and the potential at depth is extraordinary,” Paterson said. “This is really, truly a company making opportunity.”

Eastern Corridor

In the Eastern Corridor, Great Boulder has made the 600m-long Ironbark discovery, which has a resource of 100,000oz at 3.3g/t gold, starting from surface.

“This is a very valuable little deposit,” Paterson said.

Great Boulder will release a scoping study for Ironbark in the next 6-8 weeks.

“What we actually think is the present value of Ironbark itself should be well in excess of our market capitalisation, so that will demonstrate how junior companies like ourselves are vastly undervalued compared to the assets we have in the ground,” Paterson said.

The company also has a resource estimate coming for the newly discovered Saltbush deposit in the Eastern Corridor.

It has also defined several areas in the Eastern Corridor with a larger and stronger geochemical response than the Ironbark discovery.

Great Boulder has been working with Dr Scott Halley, which Paterson described as Australia’s best geochemist.

“He made this comment a couple of years ago now that the combined augur coverage down this Eastern Corridor has defined a hydrothermal gold system bigger in extent than the Paddy’s Flat gold system – bear in mind that Paddy’s Flat is a multi-million ounce gold camp and we’re really just scratching the surface of this system,” Paterson said.

Plenty of production options

Great Boulder appears to be flushed with options to move Side Well forward.

The company has completed some early metallurgical test work on Mulga Bill, indicating recoveries of up to 98.7%.

“We were pleased and surprised by the results we got, which was extremely good, fast leaching, very, very high recoveries and moderate cyanide consumption, so this is the sort of product that could go through anybody’s mill,” Paterson said.

While Westgold Resources is the dominant player in Meekatharra, there is 10 million tonnes per annum of milling capacity within a 200km radius of Side Well.

As well as Westgold, other nearby companies include Ramelius Resources to the south and Catalyst Metals to the north.

“We don’t necessarily need to build our own milling capacity if we don’t have to but the operation will be big enough that we think we can justify it ourselves,” Paterson said.

“Whether Great Boulder remains alive for that time remains to be seen because there’s plenty of big players in the area and this is an attractive opportunity.”

Earlier this month, Great Boulder signed a memorandum of understanding with Toronto-listed Monument Mining to investigate potentially processing Side Well ore through Monument’s nearby Burnakura mill.

Burnakura is on care and maintenance and previously operated at 260,000tpa.

The results of the Ironbark scoping study and a Burnakura restart study will be shared.

Bell Potter Securities analyst David Coates said the agreement could create competitive tension with other players in the region.

“Numerous organic and non-organic catalysts continue to emerge for Great Boulder in a region ripe for consolidation to build scale,” he said.

“In addition to creating optionality, this is also a measurable de-risking step.”

While not formally covered by Bell Potter, Coates said Great Boulder continued to trade relatively cheaply compared to its peers.

Looks like the market is slowly coming around with the stock up 125% since the start of the year, including a near-10% rise yesterday.