In a city that has an entry statement declaring itself “gold capital of Australia”, it came as a surprise to geologist Matt Painter that nobody had ever named a company Kalgoorlie Gold Mining.
- There are currently more than 700 exploration companies listed on the ASX
- Expenditure on gold exploration in Western Australia has reached record highs
- The boom in exploration activity is putting pressure on drillers and assay laboratories
When Dr Painter and some of his team began throwing ideas around for a name for their new gold exploration company, they considered using “gargulla”, known locally as the Aboriginal word for Kalgoorlie.
But they didn’t end up needing a substitute.
It turned out that since gold’s discovery at Kalgoorlie in 1893, the most obvious name had slipped through the cracks.
“To be able to nail down a name like Kalgoorlie Gold Mining … it’s fantastic, we couldn’t believe it,” Dr Painter told the ABC.
Kalgoorlie Gold Mining was spun out of ASX-listed nickel player Ardea Resources, raising $7.5 million in its initial public offering [IPO] before listing on the stock exchange on November 17.
The company’s flagship project at Bulong is just 35 kilometres east of Kalgoorlie’s famous Super Pit gold mine.
Dr Painter said so far 177 historic mine workings have been identified on the tenements, which were active at various times between 1894 and 1940.
“I think 125 years after Kalgoorlie was discovered we’re only just starting to get a handle on what’s going on out here,” he said.
“I’ve worked on outcropping deposits in Africa very early on in their genesis and they’ve developed into multi-million-ounce deposits now, and when I walk over some of the ground at Bulong I’m getting some of those feelings.
“That’s what we want to aim for, we want to aim big. Clearly we’ve got some gold mineralisation poking out of the ground and that’s what we’re following up on.”
Rivers of cash flowing
Australia’s booming mineral exploration sector is showing no signs of slowing down.
New research by business advisory firm BDO this week revealed investors sank more than $2.55 billion into mineral exploration in the September quarter, on par with $2.54 billion in the June quarter.
It found there are now 704 exploration companies listed on the ASX, which is 26 more than the June quarter and 62 more than a year ago.
Of those, 45 companies were able to raise funds of $10 million or more.
BDO’s global head of natural resources, Perth-based Sherif Andrawes, says it’s the best market for IPOs since the global financial crisis.
“It’s certainly the strongest it’s been since probably 2007, 2008,” he said.
“The pipeline of IPOs for the next quarter, the December quarter, is healthy too and I think the first quarter of 2022 is going to be pretty strong as well, so I think the uptick that we’ve seen is going to continue a couple of more quarters yet.”
Mr Andrawes said while gold remains a hot commodity, the mineral exploration sector is slowly pivoting away from traditional metals to battery minerals because of their use in electric vehicles.
“But the theme that’s probably overriding that over the past year or two, and we’ve certainly seen it in this last quarter and the one before that, is battery minerals.
“And that’s certainly predicated on the energy transition.”
Record expenditure on gold
The amount of money being spent on gold exploration in Western Australia has hit a new all-time high.
The latest data from the Australian Bureau of Statistics showed $309 million was spent searching for the precious metal in WA during the September quarter — the most since records began in 1988.
That figure was almost double what was being spent at the peak of the last mining boom and up from $117 million during the same period five years ago.
Warren Pearce, CEO of the Perth-based Association of Mining and Exploration Companies, said the current level of activity is equivalent to a modern-day gold rush.
“The last 18 months have been exceptionally strong in gold because the gold price has been very high and looks to be sustaining its high price into the future,” he said.
“So, there’s a lot of opportunity particularly in this investment window to get exploration work and to get into project development while the price is favourable.”
Mr Pearce said the record levels of investment are putting enormous pressure on the exploration industry.
“Look they’re bursting at the seams,” he said.