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Australia's new gold rush lures prospectors Down Under
November 30, 2017 / 1:18 AM / in 12 days

Australia's new gold rush lures prospectors Down Under

SYDNEY, Nov 30 (Reuters) - Canada-based Kirkland Lake Gold will list its shares on the Australia bourse on Thursday after investing millions of dollars and joining dozens of other prospectors in a modern-day gold rush.

Kirkland Lake expects to produce a quarter-million ounces of gold in 2017 from a mine it bought a year ago in eastern Australia and is also dipping a toe into a tantalizing new gold region on the other side of the continent.

More than 25 publicly-listed companies and legions of small prospectors are exploring for gold on the western fringe of Australia in an area known as the Pilbara, better regarded for iron ore.

The target is gold occurring in clusters of pebbles and which investors such as Kirkland are betting will compare in size with South Africa’s massive Witwatersrand Basin, where more than a third of the world’s gold has been mined.

People have made fortunes mining iron ore in the Pilbara, including Gina Rinehart, the world’s richest woman, according to Forbes. But until now no-one’s much looked for gold.

However, in the past year a record 1,896 gold prospecting licenses were granted by the Western Australia Department of Mines, many for individual prospectors known as “detectorists” trying their luck.

“The Pilbara will be the next big thing or we’ll be looking back in 12 months saying, ‘oh, that was interesting and that’s all’,” said Joe Treacy, managing director of explorer Marindi Metals.

This month, Marindi found 63 separate pieces of gold, the biggest a 6mm nugget (1/4 inch), sending its stock up 42 percent.

The excitement stems from the discovery of gold in July by another Canadian company, Novo Resources, at the Purdey’s Reward prospect with joint venture partner Artemis Resources.

Novo’s samplings uncovered watermelon seed-shaped nuggets.

Then in September De Grey Mining discovered more nuggets at a spot named Louden’s Patch, 100 kms (62 miles) to the east of Purdey’s Reward.

Novo shares have leapt more than six-fold since January, while De Grey’s shares are up nearly five-fold.

A month ago, Kirkland Lake’s chairman, Canadian billionaire Eric Sprott, invested A$5 million ($3.8 million) through Sprott Capital Partners in Kairos Minerals, another explorer in the region.

Kirkland Lake already holds 18.2 percent of Novo via a A$56 million investment, and earlier this month subscribed to A$5 million of De Grey Mining shares, pending shareholder approval.

Out in the Pilbara, it took retired carpenter Pete Caudwell just three days to find two dozen gold nuggets - almost enough to pay for his A$6,000 metal detector.

With overhead costs now covered, Caudwell, who still speaks with a thick British accent half a century after migrating to Australia from Nottinghamshire, is looking to turn a profit.

“I’ll be back again after the summer passes to try my luck again,” Caudwell said. “It’s too hot to prospect on my own there now, but there’s gold out there and I want to find it.”

Prospecting is proving particularly popular among so-called “Grey Nomads,” retirees with a bent for traveling around the country in caravans and motor homes.

“I‘m not the only one with a metal detector, there are plenty of other Grey Nomads with the same idea,” said Caudwell.

$1 = 1.3177 Australian dollars) (Reporting by James Regan; editing by Richard Pullin)

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