In 1989 Wardley James Capel Ltd (subsidiary of HSBC) published a resource estimate of over 1.1 million tonnes at Mt Freda with 600,600 tonnes @ 5.65 g/t Au in measured and indicated and a further 497,000 tonnes @ 4.96g/t in the inferred category for 189,000 ounces. Todays Value over $A472,500,000. Ausmex current Market cap $30m.

Input: May Mellor former Brokers, Dr James Ellis, Kim Duke, Queensland Mines Department (DNRME), Mt Isa Mines Dept, Goldman, Aerial & Survey, Wardley Ltd.

Download: Wardley James Capel Resource Statement Report 1989

We have been watching Ausmex for a while and have carried out some investigations into the historical events on this Mine. Ausmex Mining Group have been reporting some very high grade Gold grades as part of their resource upgrade into their flagship Gold Mine Mt Freda. The Mt Freda Mine is one of the few Gold Mines in the Cloncurry mineral field that are pure Gold plays. What got our attention is one of the most experienced and colourful mining identities as its major shareholder. We wondered why and how. Is there a pot of Gold at the end of this Rainbow. We rang to find out.

How it all got started

Mt Freda Gold Mine originally named Saracenesca mine after being discovered and mined until 1895. Mt Freda is a +350m long orebody with an average width of around 4.5m. In 1934 Mt Freda recommenced mining of high grade Gold. Mt Freda in 1934 was mining from underground, via 3 vertical 120′ (36m) vertical shafts with east and west drives on the 3 levels. The Queensland Government records show Mt Freda produced Gold at an average grade of 26.25g/t Au.


The Mt Freda Mine laid idle like most mines with expired Mining Leases from mid 40’s until around 1985. Mt Freda was then pegged as a Mining Lease together with a number of other Mining leases that abutted Mt Freda, by Mr Albert Okeefe in 1985. Mr O;Keefe began mining Mt Freda at the Western end of the orebody. Mr O’keefe constructed a small 2,000 tonne, cyanide heap leach processing operation, producing Gold at a recovery of 12g/t Au. Several additional Mining Leases Mr O’Keefe pegged together with Copper gouger, Mr Wayne McCrae. Together in 1986, McCrae and O’keefe mined high grade Copper/Gold ore at Evening Star and the Canteen as a two man operation ( both mines now owned by Ausmex). The ore mined from the Evening Star and the Canteen records show an average grade of 10% Cu and 6g/t Au, selling the ore to Mt Isa mines.

Mr Okeefe, the owner of Mt Freda in 1985-1986, was producing Gold bullion from his cyanide heap leach operations. Mr O’keefe, in late 1986 decided to sell all of the Mining interests in Cloncurry including the Mt Freda Gold Mine and associated leases, Canteen and Evening Star) to pursue his cattle interests. History shows that in 1986, Wayne McCrae, offered to buy all of his mining interests. Records show DMR paid Mr Okeefe a total of $1.25m for the suite of tenements and injected the projects into an IPO on the ASX, namely Diversified Mineral Resources NL.


Within 12 months of the purchase Diversified Mineral Resources NL (DMR) after raising $5m with prominent Sydney stockbrokers May Mellor, ( DMR had constructed a CIP processing plant) the brokers to the IPO, in 1987. We recently spoke to two of the brokers who raised the funding for DMR during our investigations and reveal that DMR built a complete mining operation and an operational and commissioned CIP plant in record time. DMR were pouring Gold within 9 months from start of construction. The mining of Mt Freda was carried out by local mining group and employed only locals from Cloncurry. The reported average head grade taken to the processing CIP plant was 4.2g/t including dilution from waste rock and a 98% recovery of Gold. The grade of the orebody being mined was reported as 5.5g/t Au before dilution.

History shows that by mid/late 1987, Diversified Mineral Resources listed with an IPO at $0.20c was trading on the ASX at between $1.60 and $1.72c per share. McCrae as MD of DMR, had obviously, satisfied his shareholders that what he said he would do he did. One of Australia’s richest men and a billionaire at the time was Mr Dieter Kahlbetzer. Mr Kahlbetzer, was a cornerstone investor in the Company. The Company flourished until the the US stock market crashed and the Gold Gold price was shattered and by 1989 had crashed to $389 an ounce. DMR at that time had been drilling at DMR leases in the Gulf of Carpentaria and had discovered at some old workings of an historical Lead, Silver Zinc Mine called the Silver King. Records show Silver King was an historical Zinc/lead Mine in the early 1900’s. It was later renamed the Century Zinc Mine and was at the time the largest Zinc deposit in the world. DMR sold the Century to CRA (renamed Rio Tinto in 1990.


Because of the weakened Gold price in 1988, it appears that McCrae and the Board of DMR had decided to close the Mt Freda Gold mine, due to the deteriorating gold price, only breaking even at such a low Gold Price. (Under $389 ounce) DMR employed the services of a large UK banking and resource group HSBC’s subsidiary Wardley James Capel with their headquarters in Victoria to sell Mt Freda Gold Mine. We understand the Bank carried out a full due diligence and geological resource estimates based on drilling. The resource estimate published in 1989 (after the closure of Mt Freda) by the bank for DMR was over 1.197 million tonnes, with 600,600 tonnes @ 5.65g/t Au in the measured and indicated category and 497,000 tonnes @ 4.96g/t in the inferred category. Kitco had previously published the Wardley James Capel Report in a previous report on Ausmex.


DMR at the time also had drilled and proved up a 200million tonne, high grade coking coal resource at their coal tenements known as Burton Downs. Investigations and history reveals, DMR Directors had decided that because of the demise of the Gold price and the demand for coking coal from Japanese smelters, they were better to concentrate on the coal. Records show that the Mt Freda CIP plant was auctioned off and the Mt Freda Gold Mine was sold to a group from Sydney who in turn sold to a South African Black Power Group and was eventually sold to Queensland Mining Group.

In 2017 a group led by Mr Matthew Morgan purchased the Mt Freda Group of leases via a listed Company Eumeralla Resources and later changed the name to Ausmex Mining Group. Ausmex have been drilling the Mt Freda Group with some great success for the past three years, however, the market has not reacted and we are told the stock is controlled by day traders and cannot get traction. It appears a coup of the board was orchestrated in June of 2020 and a new board installed.

With the news today of the high grade infill drilling, Kitco contacted Mr McCrae in Hong Kong where he lives, for his comments. Mr McCrae said ” I am happy to buy the stock and these prices and continue to accumulate. I have now accumulated over 112m shares and still buying.” It appears that a lot of the market aware of the 1989 resource at Mt Freda and the Wardley James Capel assessment of the resource of over 189,000 ounces still to be mined.

Kitco, had a five minute frank interview on the phone with Mr McCrae (now Ausmex’s largest shareholder) from Hong Kong today. Today 7th Jan 2021, the Company reported to the ASX, very high grade drill results from diamond core drilling at Mt Freda. When asked, “why are you the major shareholder in Ausmex?” Mr McCrae said, the high gold grades announced today, are no surprise to me, its what I know is in the ground”, he said, “Ill back the Wardley Resource Estimation Report, (200,000 ounces) before any other resource statement, I know better than anybody what lies below the pit at Mt Freda. I was the miner and the processor of the ore when I was MD and Chairman of Diversified Mineral Resources. The reason I am in Ausmex, is because Ausmex purchased my old Gold Mine the Mt Freda Mine. Its unfinished business for me”, he said. “The share price at DMR during the time DMR owned Mt Freda was $1.70, so I am more than happy to buy at these prices.” He said.

Mr McCrae, our final question, ” is there a pot of Gold at the end of this Rainbow?” He replied “Is the Pope Catholic”.

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