Ausmex continue to deliver high grade Gold results from their Cloncurry mining tenements. The Company announced on Friday 4th October that they are moving to fast track their Gold production. After watching this Company for the past 12 months and the high grade Gold being intersected with their drilling campaign at the Mt Freda and Golden Mile and other associated prospects, we at Goldtalk (as well as other commentators and analysts) still cant understand how this Company has a market cap under $50m.

The Company also advised, in their recent announcement, that they have a ore processing agreement with Round Oak Minerals at their CIP processing facilities in Cloncurry. Round Oak is a subsidiary of the giant WH Soul Pattison group. Round Oak is Ausmex’s JV partner at the Golden Mile Prospect, with 80% Ausmex and 20% with Round Oak. The Company says, “the luck of having a 650,000 tpa CIP plant in Cloncurry only 50klms from the mine site and transport by bitumen road is a coup just by itself ” There are 3 or 4 Gold/Copper plants within a 50klms radius of the Mt Freda Complex operations, The Company reported, all of the nearby processing facilities have excess processing capacity. This the need for Ausmex to raise capital to construct their own stand alone Gold treatment facility.

Historically, the Mt Freda Gold Mine was operated in the mid to late 1980’s by ASX listed Diversified Mineral Resources, (DMR). DMR operated a CIP plant, constructed on site. The Company mined y open cut method and produced Gold at an average recovered grade of 4.4g/t Au, but with the Gold price dipping below the $280 level the company reportedly closed the operations.

Mt Freda Gold Production 1987 – 1990

Gold Production Open Cut Mining Carbon in Pulp process Mt Freda Mine site

DMR was taken over by a giant South African Company, Roodenpoort Mining, and was eventually sold again, with the mining leases being purchased by Queensland Mining Corporation (QMN). QMN completed a 2004 JORC compliant resource statement, (with a limited, shallow drilling program) for a resource of over 100,000 ounces of Gold and 1 Million lbs of Cobalt.

As a single operation DMR was a listed ASX Company with a market cap of $A300m. Ausmex now own the Mt Freda Gold mine together with a raft of other high grade gold mines including the 8 historical Gold mines that make up the Golden Mine that when in production in the 1930’s produced an average grade of 55g/t Au. The Gold price at the time DMR operated Mt Freda was $300 per ounce. Ausmex, now own the Mt Freda Gold mine, together with the additional prospects and the Gold price at $2,250 an ounce, has a market cap of $47m, just doesn’t make sense.

Ausmex has announced that only limited earthmoving is required to mine and treat the first 50,000 ounces. The recent drilling has confirmed that the high grade continues at depth with:

  • Drill Hole: MF 193; 5m @ 6.9g/t Au within 16m @ 2.6g/t Au from 114-130m.
  • Drill Hole: MF197: 6m @ 4.8g/t Au fm 270-276m including 2m @ 13.3g/t Au and 1m @ 21.8g/t Au.
  • Drill Hole: MF199: 8m @ 2.2g/t f, 92-100m.
  • Drill Hole: MF203: 6m @ 2.1g/t Au 289-295m.
  • Drill Hole: MF177: 12m @ 4.1g/t Au fm 103-115m.
  • Drill Hole: MF187: 6m @ 3.6g/t Au fm 133-139m.
  • Drill Hole: MF170: 5m @ 7.0g/t Au fm 198-293m.
  • Drill Hole: MF186: 24m @ 2.8g/t Au fm 109-133m, including 6m @ 10.1g/t Au.
  • Drill Hole: MF183: 7m @ 5.2g/t Au fm 147-154m includes 3m @ 11 g/t Au

The Company announced to its shareholders on 9th September, a Significant Gold Exploration Target, based on JORC compliant, geological basis of their drilling to date. It also announced a resource target at the Mt Freda Complex of between 19 million and 30,000,000 million tonnes with a Gold resource of up to 3.29m ounces.

Last month, we at Goldtalk, looked at a list of Australian Gold Explorers exploration results, and found that Ausmex were without doubt delivering, the most consistent high grade Gold results in Australia. We named Ausmex, in own opinion, an undervalued and underrated Gold exploration Company. We confirm that opinion today, considering these latest results, combined with the race to get into production re-enforces our view. With the Company now announcing they are fast tracking Gold production, we are even more convinced.


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