Barton Gold [ASX:BGD] is an Australian-listed miner with a strategic, first mover position in South Australia’s Gawler Craton. It is engaged in reopening a proven gold district which, despite 130 years of gold production, is still relatively underexplored. We met recently with the management team.
South Australia has about 25% of Australia’s gold resources but only 2.5% of its actually gold mining activity. Most of the regional mining activity is around the copper and uranium resources.
Barton Gold is growing its gold resource base at what looks to be quite a low cost per ounce. It only recently came onto the market in Australia (2021) and currently has a market cap of approx AUD 40.5m and AUD 8.29m in cash. Retail and HNW investors account for slightly over half of the stock.
We spoke with CEO Alexander Scanlon who was over in Europe recently meeting with investors. What impressed us was the scale of the undertaking involved here, with a portfolio of assets that extends to developing mines, brownfield mines and advanced resources. The whole is backed up with existing infrastructure and lies across the main Perth to Adelaide railway.
The company is consolidating its assets in the region, bringing in new exploration technology onto a 5000 square kilometre land package with a 1.1m ounce resource base, and also controls the only operational gold mill in the area.
Barton Gold grew its existing resources by about 70% before it even listed. Its flagship project is the Tunkillia project, and is now exploring further targets at Tarcoola. It found three new gold zones at Tunkillia, demonstrating its model of reinvestigating historic mine workings.
A large program was started in September with a new gold zone called Area 51, interesting because it sits 5km away from the high grade centre of the main deposit.
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Scanlon thinks the company is looking at a potential open pit operation of scale. The company has been diamond drilling with 14,000m of drilling now completed. It looks ideal for a bulk open pit operation with slightly under 4000m of assays due out.
“This is where the rubber hits the road after so many years of work,” Scanlon says. “We need to think of how we are going to develop it.”
In early 2022 the company cleaned out the circuit in its mill, generating over AUD 1m in gold. The mill is a simple and flexible model, but there are opportunities to optimise the gravity circuit to potentially increase the value of concentrate. A further 10 tons of material has also come out of the circuit since then, providing further windfall value. This should create more exploration capital for the company.
“Every 5000 metres we have drilled, we have found an advanced gold zone,” Scanlon says.
The mill can process 650,000 tons per annum. It is currently on care and maintenance. It will play a role in Barton’s long term plans, helping the company to become an operator (which will significantly improve its credit profile). Barton has kept its activities very quiet, but since it broke cover in mid-2020, a number of other players have come into the region. There are some 320,000 JORC resources within 40km of the mill.
Scanlon reckons there are 500,000 ounces of gold to be mined within 50km of the mill. This could become a quite interesting income earner for the company, in addition to the gold assets it already has scoped out.
