Australia’s Fosterville Mine, owned by Kirkland Lake (TSX:KL), is considered one of the best addresses for high-grade gold deposits in the world. The mine may have played no small part in the Canadian gold producer’s phenomenal resurgence since 2015. Fosterville is rightly considered an exceptional project: after decades of successful production, the mine still has 2.6 million ounces of resources with average grades close to one ounce.
It is therefore not surprising that around Fosterville in the Australian state of Victoria, pretty much every license has been awarded. Entire companies have been formed on the back of Fosterville’s success, most recently Fosterville South (TSXV: FSX), which is exploring an extensive portfolio of projects around Fosterville. Fosterville South went public in April 2020 and was valued at several hundred million dollars shortly thereafter. The company still has a CAD 100 million market capitalization.
That brings us to Canadian gold explorer A.I.S. Resources Limited (TSXV: AIS, FRA: A8S) and its recent announcement of 20 drill holes at its Fosterville-Toolleen project. We’ll note: AIS’s market cap currently stands at CAD 14 million. Three things raise eyebrows: First, Fosterville-Toolleen is located just 12 kilometers east of Kirkland’s Fosterville Mine and is, after all, 28 square kilometers in size (see Figures 1 and 2). Second, the CEO of AIS Resources is Australian, entrepreneur and jack-of-all-trades Phil Thomas, and third, AIS Resources’ chief geologist is Denis Walsh. Prior to joining AIS Walsh was working for Kirkland Lake exploring the area surrounding the Fosterville gold mine and is very familiar with the local geological setting. For that reason alone, his assessment carries weight. Walsh sees structural parallels to Fosterville at Fosterville-Toolleen that allow the same exploration model to be applied as at Fosterville. Gravity measurements serve as an important guide for gold exploration in this part of Victoria, providing insights into host rock structure through delineating density variations. Again analogous to Fosterville, the key gravimetric anomaly runs in a north-south direction.
Figure 1: The graphic shows a cross-section of the large-scale geological structure associated with the development of a large number of goldfields spread over hundreds of kilometers in the Australian state of Victoria (modified after Cayley et. al. 2011). The blue arrow indicates the location of Fosterville-Toolleen.
Geologist Denis Walsh argues that the corrected Fosterville position on the modified geological section more accurately represents the unique geological terrain that locates both Fosterville and the Fosterville-Toolleen project. To add to the picture, he says, within this particular terrain we have a look alike structural setting at the Fosterville-Toolleen project of gravity features sitting on the same orientation as the rich gold trends at Fosterville which in both cases are just off to the west of a regional fault. At Toolleen there is some younger geology obscuring the target area which helps to explain why a gold deposit could remain unidentified to this point. What is being sought is gold-bearing quartz and sulphide mineralization formed along a north-north-west faults, similar to the Fosterville gold mine.
Figure 2. Regional gravity image shows red-orange-yellow areas of high density in comparison to blue areas of low density with selected regional faults marked. The Fosterville gold mine and associated pit trends are on the left, while 12 km away the Fosterville-Toolleen gold project is on the right. The red line is the property boundary.
Phil Thomas, CEO of AIS, commented, “The first test drill program of 30 holes has now commenced at our Fosterville-Toolleen gold project. If we are successful in locating shear and tension veins we expect to encounter gold-bearing mineralization similar to that at Kirkland Lake’s Fosterville Gold Mine.”
Denis Walsh stated, “The gold and associated sulphide mineralization at the Fosterville Gold Mine is controlled by late-stage faults and fractures. These faults are generally steeply west dipping reverse thrusts which structurally control the gold mineralization. The mineralized shoots are typically 4 to 15 m thick and the down dip – up dip dimensions range from 50 to 2,000 plus metres. The Fosterville gold mine has proven this geological model, and we are exploring the same concept at our Fosterville-Toolleen gold project.”
Figure 3. Reverse circulation drillhole locations spaced 100 metres apart to depths of approximately 70 meters on local residual gravity image. Of particular interest is the sharp north-north-east boundary line along which the gravity response change sharply. A total of six lines are planned (gray lines).
About A.I.S. Resources
A.I.S. Resources Limited is listed on the TSX Venture Exchange and is focused on the exploration of precious and base metals and lithium. In addition to the Fosterville-Toolleen gold project, the Company owns (subject to completion of certain exploration expenditures), a 60% interest in the 58 km² Yalgogrin gold project in New South Wales (with the right to acquire 100%) and a 100% interest in the 167 km² Kingston gold project in Victoria, Australia, near Stawell. Drilling is also currently underway at Yalgogrin.
Bottom line: AIS Resources has the right property and the right team to discover something big. Transferring the Fosterville exploration model doesn’t mean a second Fosterville will be found. But AIS Resources is at least naming the size of the prize it wants to capture. We will be following further work closely, because the chance of discovering a second Fosterville mine is simply not to be missed.
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According to §34b WpHG and according to paragraph 48f paragraph 5 BörseG (Austria) we would like to point out that principals, partners, authors and employees of GOLDINVEST Consulting GmbH hold or may hold shares of AIS Resources and therefore a possible conflict of interest exists. We also cannot exclude that other stock letters, media or research firms discuss the stocks we recommend during the same period. Therefore, symmetrical information and opinion generation may occur during this period. Furthermore, there is a consulting or other service contract between a third party that is in the camp of AIS Resources and GOLDINVEST Consulting GmbH, which means that there is a conflict of interest, especially since this third party remunerates GOLDINVEST Consulting GmbH for reporting on AIS Resources. This third party may also hold, sell or buy shares of the issuer and would thus benefit from an increase in the price of the shares of AIS Resources. This is another clear conflict of interest.
