Kula set to hammer gold targets at historic WA mine site

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Kula set to hammer gold targets at historic WA mine site

Kula Gold is geared up for a maiden drill program at its recently-acquired Mt Palmer gold project in Western Australia’s Southern Cross region.

The historic operation produced more than 150,000 ounces of gold grading 15.9 grams per tonne before it was shuttered in 1944 due to labour and materials shortages resulting from the ongoing World War II battle.

The company agreed to acquire the project in a $250,000 ****** venture (JV) agreement with ASX-listed vendor Aurumin, taking an initial 51 per cent stake and with an option to earn up to 80 per cent by plunging a further $1 million into exploration during the next three years.

Management undertook a capital raising in May, bolstering its finances to the tune of about $1.2 million, to acquire the project, fund the upcoming drill program and use the balance for working capital purposes.

Upon reaching an 80 per cent interest in the project, further spending will be pro-rata, or Aurumin can dilute its holding and convert to a 1 per cent ****** royalty if its stake falls below 10 per cent.

Mt Palmer sits about 15km from Kula’s Marvel Loch gold plant infrastructure and aligns with its strategy to explore prospective ground near its existing operations. It notes that a coincident north-to-south magnetic high structure is evident for more than 8km.

Previous air-core (AC) drilling was completed in about 1993 and targeted bedrock mineralisation for a single east-to-west, 3.5km line traverse, with varying gold grades discovered between 86m and 89m.

The 1m hits ranged from 0.56 grams per tonne up to 102g/t and management says no significant basement drilling has been completed since then. It adds that the site is being prepared for the planned reverse-circulation (RC) program.

This prospect was dismissed and subsequently overlooked due to perceived paleochannel geometry. More recent exploration also replicated the previous theory and did not explore significantly into the basement rocks for a primary source of the gold mineralisation obtained in the air-core drilling. The magnetic signature that is coincident with these gold assays warrants future drilling.

The JV controls a significant portion of the eastern greenstone limb around the Ghooli Dome within the Southern Cross goldfields belt.

Mt Palmer sits about 40km south-east of Southern Cross, an old town that is 370km east of Perth and was founded in 1888 after a couple of gold prospectors discovered the precious yellow metal there late in 1887.

With the price of gold hitting all-time highs in recent weeks and maintaining a heady price of more than US$2600 (AU$3861), Kula may have wrapped its hands around an historical winner that could well kick some big modern-day goals.

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