Waratah Minerals

Thanks to the Denver Gold Group for the opportunity to speak here today. Our second year at this event. Last year was more about we were an emerging gold discovery. This year we're here to talk about how we've had the discovery. We're talking about how we're drilling it out to understand how big this system could be at this stage. So it's an early discovery, but we have up to 12 drill rigs on site at the moment. It's quite an aggressive drill program. And we really believe this is gonna be quite a significant gold district located in one of Australia's premier gold belts.

We're an exploration company. Exploration's a pretty simple business. You put together a good team of people, you have a good discovery, and then you return an above average return to shareholders. So once you get the ingredients right, you move quickly, nimbly. In this industry, we all know the risk capital's incredibly impatient. So when you have these projects and these opportunities, you've gotta move rapidly through them, and we've got the right team, and we've got a very strong conviction in what we have here.

Our location of the project: we have two projects, but what we're gonna talk about today is our Spur project located in Western New South Wales in Central West. Why we like this project is that when you look at large projects around the world, they're pretty simply characterized: large footprints. You've got multiple discovery opportunities. The geology changes. It's dynamic. You often see high grades. You see low grades coexisting. And this system sits open at the moment. So what we're doing is we're stepping out along a trend, and by the end of this presentation, I hope that you'll understand that. But we've drilled the first two kilometers of it, great success. We've got another four kilometers to go. So this is a system that we're learning the geology, and we're applying that learning as we move up and around this system.

I guess the architecture's really important for what we're talking about here. And when we look at these systems, when you look at porphyry copper deposits by nature, they're very large heat cells. They have a lot of metal budget, and they're big systems that generate a lot of gold and a lot of copper. What we're looking at here is a gold system that sits above and in the shoulders of a porphyry complex. So by nature, these systems are large. They're quite homogeneous. They have high-grade parts. They have low-grade parts. But they really lend themselves to bulk mining.

And when we look at the Cargo complex here, that's the area in pink, our gold discoveries and our gold is occurring around the edges of it, starting at Spur in the south there, moving up to Consols, up to Ironclad, Golden Clad, Long Gully, and up to Gazads. So at this stage, we've drilled the first one and two. We've had a discovery at three. We're still trying to work out how big it is. But this is a six-kilometer trend of deposits that are linked, and that's really, really important, because when we look at the scale of the system, this is how you generate large ore deposits.

We're all about exploration, and the drill bit's very, very important for us. I think when you understand this system, you look at the momentum that comes out of this. A lot of intercepts with 100 gram meter intervals. That tells you you're in a fertile system. It's a bit of an industry ranking now for gold deposits around the world. So if you look at the drill holes drilled in the last 12 months, we've got an incredible strike rate of those really good holes. We're sitting here at the moment, 80 kilometers of drilling almost done for this year, 11 drill rigs active. I'm looking to grow that drill system. And you look at some of the drill holes we've been putting out last week, 48, 46 meters at close to 7.5 grams gold. Broad zones too. So this is a system that we're still understanding, but it's very dynamic, but it's got a lot of the key characteristics you wanna see of a world-class discovery.

We run a pretty tight register, 388 million shares on issue at the moment. Board and management on a fully diluted basis have about 10% of that. The share price at 62 cents. Market capitalization at 240, but the last week or so, that's sitting close to 80 cents with a market capitalization over 300 million. And we're quite well-funded with $57 million cash on bank. Strong register, really important. Some good industry people there that understand the industry. Very institutional and a lot of high net worths. And over the last two years, we've been able to successfully raise money at ever-increasing prices. So we have a clear strategy of how we protect that register. We like to keep it in control, and we've always done raises close to or very minimum discounts.

I won't dig into it too much, but suffice to say we've got a team. It's a strong discovery record. More importantly, globally, we understand what these systems are. We've all worked in them. Several people have done PhDs in these types of systems. We know how to take it through the development pathway and certainly into the studies. And we've got a team that's also delivered commercial outcomes to all shareholders in these sorts of explorations, whether they've been hard or difficult. So good discovery record. We know the belt we're working in. We know the geology. So two of our directors actually live in Orange, so a very experienced team. But significant commercial capability to take it to the next level.

The Macquarie Arc is one of the premier gold and copper belts in Australia. It's home. It's about 80 million ounces discovered in this area in the last two decades. Hosts very large deposits like your Cadia system, your Lake Cowal, and your Northparks, and these are very large porphyry systems. Cowal is more your intermediate sulfidation. So what I'm gonna talk about today draws a lot of analogs with Lake Cowal, but this is a fantastic place to work. Several major mining opportunities. Very large projects, some of the largest projects in Australia. It's a pretty stable area, and it's a community of mine workers, which is really important too. Access to that human capital, access to engineering groups and all that is all very close.

If we zoom into where we are, the Spur project is located about 40 minutes drive to the west of Orange. It's a major city in central west of New South Wales. We're about ten kilometers to the west of the large Cadia complex operated by Newmont. And you see the blue ground around that. That's an exploration project at the moment being managed by Goldfield. So great area to be, high voltage power. We've got state grid, several mining operations, skilled workforce, but an amazing amount of untested opportunity, and that comes when you often have these blocks of ground held for a long, long time. Cost-effective exploration, no seasonality, all those good things you wanna see. Drilling around the clock, and certainly advancing the project. We don't have to worry about weather. We don't have to worry about those sorts of things.

So a little bit about Spur. Sits on 100% owned exploration license. That main exploration license covers certainly the Spur area, which is in the center there. You see that magnetic high with the labels around it from Spur consoles. That's the main area. And that actually sits on a mine in common. So that mine in common is a really important piece of the puzzle here. It's a very strong tenure to have in New South Wales. It means conversion to mining licenses quicker than any other tenure. And then within that, we actually hold several mining licenses too that we've been able to acquire over the last few months. So very strong foundations, good register, strong tenure, sitting in a very good area.

You may ask why this deposit sits here today. It's had 160-year history of exploration, and in that year period, about 60,000 meters were drilled across the district. We've drilled about 80,000 in the last year, so we've certainly stepped up that understanding of the system. But before the war, this was a large alluvial field. Had a lot of alluvial gold, 30,000 people living on it. The war happened, people took off, and it kinda got forgotten. '70s and '80s, people returned. Some of your larger copper groups, your BHPs, your Anacondas, your Billitons returned to the area looking for porphyry coppers after what they learned from South America, and also here in North America. Drilled a couple of holes, proved that it was a porphyry system. Very large intervals of 0.2 copper. Ticked that box.

Newcrest came along on the back of the Ridgeway discovery in '86, drilled similar holes. But the curiosity of those holes is what we saw where there was no gold in them. It was only copper. So we got hold of the project in '24, and then went about drilling, looking for the gold, 'cause we knew there was something missing in the story, and it was an important step of our understanding. So some of the first drill holes there in the RC drilling, 11 meters at 10 showed us it had grade. And then last year, we put together a hole 208 meters at over a gram that showed it had scale. So since then, the project's been moving rapidly, and we have a clear strategy of where we're taking this project. And more importantly, it's about low discovery costs. So the more you can throw at this, we just can't get the holes in the ground quick enough at this stage to move up and around the system.

I'll show you a little bit about growth. We're pre-mineral resource. We don't have mineral resources yet. But you can see the best way to show the growth of this system since July '24 is you just keep your eye on those red patches. They'll continue to grow to where we are now.

So if we step into consoles, which is our discovery we had last year, it's a growing system. It's 300 meters by 400 meters, 600 meters vertical. We believe that there's probably about a kilometer vertical extent of this system. So that's how you build resources. And basically what we're looking at is a series of east-west quartz sulfide sheeted vein arrays. Each one of those systems is 20 or 30 meters wide, but then it has a buffer of lower grade copper. So you're generating quite a big system here. And this is still early days here. Despite finding this a year ago, we still haven't hit the edges of it. We still haven't hit the sides of it, and we still haven't hit the bottom of it. And as we advance, we see it moving up and around.

What's it look like in cross-section? We look footwall for the Caloophy fault here. We can see how these high-grade shoots amalgamate. And we suspect they're actually coalescing at depth, which is probably suggesting a hidden porphyry down there somewhere. But what we're looking at is several high-grade zones. A lot of coarse gold in this. When you look at the rocks there, you see those bottom rocks there. Very potassic, altered, pink, reddening. It's exactly what you see at porphyry environments of breccia. But it's running 120 grams gold, a very low copper. So not uncommon features you see in some of these porphyry systems, Lachlan Fold Belt, with gold sitting in the potassic zones above the porphyry.

So we look at that section. We intercepted these zones quite deep, but what we're doing is lifting them up the surface. And drill hole 75 we put out this week was another 80-meter step up dip. That got a great result there, with 46 meters at close to over seven grams. So that's just showing the high-grade nature of these systems.

A little bit at Spur. We have two drill rigs on this at the moment, and that's drilling out into a pattern. We're trying to basically pull this together into a resource model, which we're doing at the moment. Covers about a kilometer by 250 meters. We've drilled it down to 300 meters, open pit depth. It remains open at depth. And what we are stretching it up to the Essex fault. We cross that Essex fault, we get into consoles, which we previously spoke about. But multi-phase quartz gold stringers here. High grades occur mostly in shallowly plunging zones. And if we look at these shallow plunging zones, we can see there's a control with the Tiwi fault there. But off that, we often get these intersections of these shallow plunging funds that host high-grade material. Anything up to 10, 15, 20 grams over 10 meters.

So at the moment, we're drilling this. We've got it on, I guess, a 50 to 60 meter drill pattern, and it continues to expand encouragingly at the same time. But again, similar theme to mineralization, probably a shallower level in the system than consoles. What it's telling us is that this will progress into a consoles type system at depth.

So we talked about the first two kilometers. Now we're gonna talk about the rest of the another four kilometers that wrap up in this system. And what we had to do, they're hard to see there, but you can see the Golden Clad and Ironclad. They were mining licenses we had to consolidate. We achieved that a few months ago, and that gave us the license to step out now. Took an RC rig, stepped out and started going and drilling some of the other gold systems that had historical mining in the northern part. Got some great results there. Alpine, 20 meters at over, close to two grams from 50 meters, 10 meters at four from 76. Gazads, eight meters at three and a half grams from 120 meters. And Golden Clad, 35 meters at two.

So these are the drill holes that we went out with a scout program and drilled selective areas along that trend. So what that did was it told us that we saw the same rocks, we saw the same type of alteration, seeing the same type of mineralization. So what that told us was that it was a similar theme that we were able to now continue to track up, take the diamond rig, and then continue to drill these systems as they move to the north. And the next six months will be interesting 'cause we've already started that program at the moment. We've got a drill rig at Golden Clad at the moment. And we're testing some of these areas. We wanna make sure that we're not missing some areas that are very high grade, shallow, while we're drilling some of the other projects. So now it's about prioritizing where we need to be as we move towards the maiden resource.

The network's pretty vanilla. At this stage, we've tested both Spur and Consols zones. Very, very good results. Very high recoveries from gravity, which you'd expect with very coarse gold. And conventional leaching recoveries, the rest of it, that sort of 74%. So you're looking at recoveries that are above 90%. So very good. No arsenic, none of the nasties, none of those sorts of things you need in a type of system. So a very good system.

As I said, how you generate big systems is you work in areas with large heat flow. And what we're looking at here, and this is our model, we're in an area of porphyries. You've got Cadia less than 10 kilometers away. You've got North Parkes, and you've got Lake Cowal. All these are modifications of the same theme. What we're looking at is it's important that you got two real value engines here. The epithermal gold: we believe the upper part of the system will be a multimillion-ounce system, very similar to systems you see in South America, around the world. In some of these porphyries, they generate that. That's great. But deeper down, we believe that there is a copper system here too. And all indications are that as we drill deeper and getting more gold, it's getting hotter, and we're getting close to that source. So this is a district that will have a lot of exploration to go. The company's strategy in the next six to eight months is to focus on getting out that gold resource. And in the background, I believe that that will generate the vectors for the deeper copper systems.

So a little bit technical, but I think it's also very important that the systems you work in often lend themselves to the types of mines you have. And these systems, these epithermal systems, particularly ones associated with porphyries, they have vertical extents of a kilometer. As I said, we're proving that up at the moment. They create favorable resource economics. I think that's really important. They're attractive targets for open pit style mining, sometimes underground, bulk underground. But low capital intensity, the big systems, a lot of gold. And I think for us, more importantly, this system is one of the easiest systems I've worked on in drilling. There's a clear geological framework to the way we attack it. It's delivering.

So I think if you look on the side there, you see those pictures, the top two rocks, that Spur upper part of the system, very green chlorite, lower temperature. We cross a major fault, we get into Consols. We're getting closer to the porphyry environment. Seeing breccias, a lot of free gold. So temperature increasing, grade increasing. It's all telling us to go deeper.

So for us, we have a pretty steady drill program, bouncing between 11 and 12 drill rigs at the moment, which is one of the most aggressive programs on the east coast of Australia. Spur, we have two drill rigs at the moment in number one down there. They're plugging away. We like the area between Spur and Consols. We're expanding that. That's a new area. We get into Consols, we have seven or eight drill rigs allowed on that. And now we're starting to drill Golden Clad, Ironclad, and hopefully by the end of the year, we'll have a couple of diamond holes up in the north too. So that trend there is basically stretching from an alluvial gold field, which is Gum Flats, all the way up and around over six kilometers. So a combination of resource drilling, expansion drilling, exploration, and some deeper drilling going on at the same time.

So we have a lot of news flow. There'll be constant drumbeat of news flow over the next 12 to 18 months. And I think that's really important for a story like this to generate those catalysts you need. So looking at generating an exploration target, probably a main MRE, diamond drilling in the north, continued network. And I think the opportunity here is this is a rare 10-year opportunity. It's a great place to develop a mine. And I think the company has that investor appeal that it's a pretty tight register, good shareholders, and we're putting money in the ground aggressively. And only a small fraction of the system's actually been explored to date. So we're in that exciting stage of how big can this system actually be. And you look at peers around the world, they can be quite big systems. That's us. Thank you.

Fantastic. Thank you, Andrew. Do we have any questions? [applause] Yep. Just stand up, please, and we'll get a mic over to you, mate.

Thank you, Andrew. Hey, John. Just wondered if you got any thoughts on how you might actually get into mining eventually. Is it too early? I'm just wondering if there's enough decent stuff near the surface for open pit or, obviously the high grade's lower down, so you might need to go straight to underground. Thanks.

Yeah. Well, we're still early stages. I think we need to work out what it looks like, and we're doing that at the moment in terms of when you build resources, you build the veins, and you understand what the nature of those systems are and the architecture, how they fit together. And that's what generates your understanding on how you would mine these systems. So early days, but there is an alluvial gold field here too that I'm not allowed to talk about how much gold's in it, but it was drilled by Billiton in the 1980s. And there is opportunities like that. So you're gonna have to take that off the top of this system anyway. But there's a lot going on. So I think at this stage, we need to run a bit hard, harder maybe even, and just see how big the system could be before we look at that.

Okay. Fantastic. Thank you. Thanks, Andrew. All right. Thank you.