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It was a centre of Western Australia’s earliest gold rushes way back in 1880. Now, just 25 kilometres from regional centre Halls Creek, the long-forgotten gold ground on which the Butchers Creek project sits is being reworked, applying modern technologies and methodology.
The ground’s being aggressively explored following a recent ‘bargain basement’ acquisition by WIN Metals Ltd (ASX:WIN) – and the company’s not disappointed, as it’s quickly adding up the ounces. Last count, 357,000 ounces, in fact.
Now before we tell you more about that, let’s look at what led WIN on a gold project treasure hunt – why it set out to find such an opportunity, when it already had promising projects primed for development.
The commodity dodge and dance
It’s all about that often unpredictable commodity game. Shifts in demand and pricing can be difficult to foresee.
In recent years, commodity prices have seemed particularly volatile – it’s hard for companies to set a course, and there’s a whole lot of risk for investors.
What it means is that as commodities fall in and out of favour, mining and exploration companies need to quickly manoeuvre and adapt, always having one eye open for new opportunities as macro tailwinds pass and headwinds hit.
Looking at right now: No one seems quite sure about the iron ore price, for example. And some of the big miners’ share prices have dampened as a result.
The copper price spiked last May but has pulled back over factors including Chile supplies, and uncertainty around what Trump’s mooted tariffs will mean for trade.
Of course, the lithium price is now miles below its highs of late 2022 – its boom/bust has been nothing short of dramatic.
Nickel had a fall from grace that’s hit companies including former market darling Chalice Mining (ASX:CHN) – hard. Plummeting from near USD$50,000 a tonne in May 2022, on news Indonesia had quickly grown its nickel sector breeding significant over-supply. This month it touched a four-year low of USD$15,000 a tonne.
Chalice darling share price gone-ville
Chalice had a share price above $8 on the Gonneville platinum group element (PGE), nickel, copper and cobalt discovery a couple of years back and the WA Government deemed it a ‘Strategic Project.’
Despite that validation, the share price is at $1.20. The Gonneville project, just 70km from Perth, remains at the pre-feasibility stage.
Before that dramatic crash, WIN had also built a solid nickel resource at its Mt Edwards project near Kalgoorlie in WA’s Southeastern Goldfields region. While that’s clearly not so exciting to investors right now, much like Chalice, the company’s management is confidently banking on a nickel resurgence one day. And it’s good to note the asset amid WIN’s overall project portfolio.
Nickel resource ready to go (when the time is right)
So WIN Metals (ASX:WIN) developed a first-rate nickel resource in Western Australia and it still has it.
But WIN didn’t wait around when the nickel price fell; it knew it had to shift priorities – as fast as possible (while strictly sensible).
While knowing it had a strong nickel play (and lithium too – but that’s yet another story and another asset), WIN’s management made the call to pivot – and it has.
It has a gold resource to build up at its Butchers Creek project in WA’s far north.
We’ll talk about that opportunity amid a hot gold market in a moment, but what we emphasise in this story is that commodities are cyclical – and so by retaining out-of-favour assets and having diversity now, a company like WIN is primed to make the most of all these opportunities when everything aligns – when there’s a resurgence in demand for each.
As MD and CEO Steve Norregaard says: There is immense “latent” value in WIN which can be quickly realised when the time is right.
Focussing on gold (and making the market aware)
WIN acquired Butchers Creek last August, and since then, has been busy moving through reconnaissance, resource definition, and exploration drilling work at the site near Halls Creek.
Of course, it’s never easy for companies that find themselves starting afresh to garner shareholder buy-in and excitement. It’s tough when you’re shedding legacy disappointments that stem largely from commodity boom and bust cycles outside a company’s control.
But Norregaard points out WIN was not going to stand still and wait for the nickel and lithium fortunes to turn around. Who knows when that will be?
“Hope isn’t a good strategy and hoping that the nickel price would recover wasn’t on our agenda,” he says.
“Less than two years ago the company had a market cap of over $100 million based on nickel and nickel alone. In the time that we’ve been listed, we’ve invested in that nickel resource, we’ve upgraded our resource base, we’ve completed a scoping study, and we’re primed ready for development.
“It might not be this year, it might not be next year, but there will be a day when nickel comes back into favour and for the company, it’s a huge amount of latent value.
“I think Indonesia’s started to realise the error of their ways… that massive amount of nickel has seen the price come down so that even in Indonesia – they’re not making a substantial amount of money.
“So, we think the market will address that and we’ll see an uplift in the nickel price in the medium term.”
Here’s a good spot to mention the lithium WIN has in its portfolio too.
It’s at that same 240 square kilometre Mt Edwards project, which not only has a mineral resource estimate (MRE) of 13.04 million tonnes at 1.45% nickel for 188,160 tonnes of nickel, but also has the Faraday-Trainline lithium play; contiguous to Mt Edwards, and with an MRE of 1.96 million tonnes at 0.69% lithium oxide.
“The latent value within the organisation is second to none”
“We’re in a position where we didn’t expect to find any lithium. We made a maiden discovery and fast-tracked that to a position where we thought we had direct shipping opportunity,” he said.
“However, the lithium price beat us. Now that sits there as another asset in our portfolio.
“Plus, there is an excellent amount of exploration upside from lithium perspective when you consider many of our neighbours in the region are very active in that space.”
Those neighbours include Mineral Resources (ASX:MIN) at Bald Hill and Mt Marion, Maximus Resources (ASX:MXR) to the north, Develop Global (ASX:DVP) to the south, and Kali Metals (ASX:KM1) on WIN’s eastern tenement boundary.
We’ll park nickel and lithium for a while: In the meantime…
Norregaard and his team have been committed to ensuring whatever pivot was made, it was going to be worthwhile, with strong short-term upside potential.
With Butchers Creek, he says they’ve landed on a “forgotten” gold region. The project has a gold deposit that produced 52,000 ounces of gold from open pit mining over two years in the 1990s. Ripe for review.
“The location hasn’t seen any significant amount of exploration in the modern era,” Norregaard says.
“We’re certainly keen to see the real potential of the area.”
Since moving in, WIN has been able to confirm a high-grade mineral resource of around 357,000 ounces (5.6 million tonnes at two grams per tonne) from two resource targets nearby.
They’ve also identified immediate near-mine drill targets, as well as multiple high-order opportunities from which to grow the resource base.
Within three months of moving in, WIN reported strong results from the Golden Crown North deposit, with all holes drilled intersecting high-grade gold. Better still, it could confirm high-grade mineralisation extended 140 metres below the Golden Crown resource, 40 metres deeper than previously modelled.
Intercepts included six metres at 10.85g/t of gold from 253 metres (140 metres below mineral resource), including three metres at 21.07g/t, and two metres at 5.05g/t from 240 metres.
Late last year, WIN told investors about a second tranche of infill drilling, which had yielded results such as 98 metres at 1.47g/t of gold from 251 metres, including 13 metres at 2.99g/t; and 77 metres at 1.68g/t from 251 metres, including 11 metres at 2.51g/t – both at the central hinge and eastern limb areas.
Spreading the word: We’re on track to production
Steve Norregaard believes the company could potentially have a large-scale discovery at Butchers Creek – to the point he’s happy to announce publicly that he has his sights set on production.
“We acquired the Butchers Creek gold project at a bargain basement price, and with an already established 350,000-ounce gold resource, of which a significant proportion is in indicated status,” he said.
“We’ve hit the ground running; we’ve confirmed the resource in terms of drilling announcements that we’ve made to date.
“Exploration upside in terms of seeing those resources grow is abundantly clear for us.
“We can see those resources growing. From a greenfields perspective there are over 60 occurrences of gold on our tenure, so an abundance of exploration upside.
“Finding Butcher’s Creek has been a real positive for the company, but, I’ll say it again, the latent value within the company is second to none.”
Management diversity key to getting it right
Balancing these multiple projects certainly sets WIN up for a busy few years, but the company’s shifting strategy is what makes its story an exciting one, according to Norregaard.
“That’s the opportunity: From where we’ve been, we had to re-engineer the company moving in a new direction,” he said.
“The real opportunity is to see a large gold resource – we know it is one that has the capacity to grow – along with that latent value in our nickel assets.
“All-in-all that really makes it an opportunity that if the time’s right, and if nickel was to make a slight resurgence, there’s a huge amount of value in this organisation.”
WIN’s ability to make this transition will be supported by a solid executive team, which brings together multiple areas of experience within mining and corporate spheres.
“Many of the individuals behind the organization come from a production background,” Mr Norregaard said.
“We’ve got a strong diverse array of skills at board level, with a chairman that has a corporate background, an exploration geologist and a processing engineer, so we cover all the spectrums.”
Make no mistake, Norregaard is determined to WIN amid this gold rush, this time around.
WIN has been trading at 1.9 cents.
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