Metal Bank (ASX: MBK) has significantly expanded its resource base at the Livingstone Gold Project in Western Australia, announcing a 73% increase in the global gold resource to 2.81Mt @ 1.36g/t Au for 122.6koz of gold. This substantial resource growth provides the company with increased strategic optionality and enhances the project's attractiveness to regional processing facilities. The development comes at a time when the Australian mining and economic outlook 2024 shows resilience in the gold sector despite broader economic challenges.
Resource Upgrade Highlights Strong Growth Across Multiple Deposits
The resource update reflects strong growth across three key deposits:
- Kingsley Deposit: 139% increase in gold ounces to 1.68Mt @ 1.35g/t Au for 73.0koz Au (Inferred)
- Homestead Deposit: 8% increase in total gold ounces to 1.00Mt @ 1.35g/t Au for 43.4koz Au (83% Indicated, 17% Inferred)
- Winja Deposit: Initial JORC 2012 resource of 125Kt @ 1.53g/t Au for 6.2koz Au (Inferred)
Importantly, all resources are located at or near surface, with maximum depths of less than 120 metres below surface, suggesting favourable economics for potential open-pit mining operations. The deposits are also situated within trucking distance to existing gold mining and processing centres, providing multiple development pathways.
Understanding Reasonable Prospects for Eventual Economic Extraction (RPEEE)
The updated resource estimates were completed by Cube Consulting of Perth, who applied updated Reasonable Prospects for Eventual Economic Extraction (RPEEE) factors using a gold price of A$4,500/oz.
For investors unfamiliar with the term, RPEEE is a fundamental concept in resource estimation that demonstrates a resource has realistic potential to be mined economically. Factors considered typically include commodity prices, mining methods, processing recovery, operating costs, and other practical constraints.
In Metal Bank's case, the higher gold price assumption (previous estimates used A$2,600-3,000/oz) enabled the inclusion of deeper mineralisation while maintaining similar gold grades to previous estimates. This reflects both the strength of the current gold price environment and the company's conservative approach to resource estimation. This approach aligns with industry trends seen in Northern Star's acquisition of De Grey Mining, where resource quality and expansion potential played a key role in valuation.
Strategic Location in Established Gold Province
The Livingstone Project is situated in an advantageous location:
- Located 140km northwest of Meekatharra in Western Australia
- Covers 395km² of granted exploration licenses
- Situated in the western arm of the Palaeoproterozoic Bryah-Padbury Basin
- Within an active mining and processing region that hosts the Fortnum, Horseshoe, and Peak Hill gold deposits (combined endowment exceeding 3Moz Au)
This strategic positioning in an established gold province provides Metal Bank with potential processing options and established infrastructure, potentially reducing capital requirements for future development. The project's location gives it similar advantages to Evolution Mining's approval for Cowal Gold Operation extension, where existing infrastructure significantly enhances project economics.
Significant Exploration Upside Remains
Beyond the established resources, Metal Bank maintains significant exploration upside through:
- An existing Exploration Target at Kingsley East of 290–400Kt @ 1.8–2.0g/t Au for 16.8k to 25.7koz Au
- Numerous other high-grade drill intersections at other targets, including results up to 4m @ 6.26g/t Au at the Livingstone North prospect
- Gold targets defined over more than 40km of strike length, many with limited or no drill testing
The company has identified multiple priority exploration targets including Dampier, Drake, Hilltop, VHF, Stanley, and Stella prospects, providing a pipeline of potential resource growth opportunities.
Mining and Metallurgical Parameters Support Development Potential
Preliminary optimisation work in late 2024 on the existing resources highlighted encouraging potential returns using open-cut contract mining with ore processing via toll treatment at nearby mills. Metallurgical testing has shown strong gold recoveries:
- Oxidised material: 94.9% recovery
- Transitional material: 95.6% recovery
- Fresh rock: 89.5% recovery
With approximately 60% of the resource within oxide material and 38% in transitional zones, the project is well-positioned for conventional processing methods with high recovery rates. This focus on sustainable and efficient processing methods reflects broader industry trends, similar to Rio Tinto's sustainable practices in Finland, albeit on a different scale and with different metals.
Why Investors Should Follow Metal Bank
Metal Bank presents a compelling investment case based on this resource upgrade:
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Resource Growth Momentum: The 73% increase in gold resources demonstrates the company's ability to efficiently grow its resource base.
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Near-Surface Resources: All deposits are located from surface to less than 120m depth, suggesting favourable economics for potential open-pit mining.
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Strategic Location: The project is located in an established gold mining district with multiple potential processing options nearby.
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Exploration Upside: Multiple untested targets provide significant opportunities for further resource growth.
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Diversified Portfolio: Beyond Livingstone, Metal Bank is advancing copper projects in Saudi Arabia and Jordan, providing exposure to both gold and copper markets. This diversification strategy could prove valuable given the impact of China's metal export ban on global markets and the resulting supply chain adjustments.
Executive Chair Ines Scotland emphasised the significance of the resource upgrade: "After reaching our first milestone at Livingstone, we now have a robust economic baseline to advance towards production and progress future works on our exploration targets and regional prospects."
As Metal Bank continues to realise value from its Australian assets while advancing its Middle Eastern copper projects, investors have exposure to both near-term development potential at Livingstone and longer-term growth from its diverse project portfolio.
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