logo
Barry FitzGerald: Kairos picks right time to ramp up Pilbara gold exploration

Barry FitzGerald: Kairos picks right time to ramp up Pilbara gold exploration

News.com.au13-06-2025
'Garimpeiro' columnist Barry FitzGerald has covered the resources industry for 35 years. Now he's sharing the benefits of his experience with Stockhead readers.
Garimpeiro's memory is a bit fuzzy on the exact date he had a coffee with Simon Lill in Melbourne's Bank Place.
But it was likely early 2019 and Garimpeiro remembers being a bit grumpy that the catch-up with the then executive chairman of De Grey Mining wasn't scheduled for the PM rather than the AM so it could have taken place in the Mitre Tavern just down the alley.
Thanks to the cleat head though, Garimpeiro remembers De Grey was trading at less than 10c share for a market cap of about $40 million and that Lill was enthusiastic about growing the company's gold resource at its Mallina gold project in the Pilbara.
His enthusiasm proved well placed. Late in 2019, De Grey made the intrusion-related Hemi discovery which has grown to more than 11 million ounces, making Mallina 13.5Moz all up after the pre-Hemi shear-hosted gold resource is included.
Northern Star Resources (ASX:NST) has just made De Grey and its Pilbara gold riches its own with an agreed $5 billion scrip takeover bid which ended up being a $6 billion takeout due to rising gold prices pushing Northern Star scrip higher.
Lill was there all the way through De Grey's journey from an overlooked junior gold explorer in the then unfashionable Pilbara – for gold at any rate – through to the last day when De Grey shareholders voted through the Northern Star takeover in April.
Any way it is sliced, the De Grey journey over the last six years has been one of the biggest single valuation creation exercises in the ASX gold space. It wasn't a 10-bagger. It was a 150-bagger, if you don't mind.
Lill is the first to say it was a team effort. And it was.
Coming from a stockbroking and capital markets background, his main contribution was bringing in the small licks of capital to keep the lights on during the hungry years, and then the big licks needed to advance the Hemi discovery to the point where Northern Star had to buy it.
Back in black
Garimpeiro would be content after an achievement like Lill's at De Grey to hold court at the front bar at the Mitre and not do much else. But that's not for Lill. He is back as a chairman guiding another Pilbara gold stock – Kairos Minerals (ASX:KAI).
For a couple of years, when the Pilbara conglomerate gold story was running hot, and another couple of years when lithium was the thing, Kairos took its eye off its Mt York gold project. Those distractions left the stock with few followers.
But starting in May 2022 when veteran geologist Peter Turner became manager director, Mt York is now getting the attention it deserves. And now with Lill as non-executive chairman, Kairos is likely on a re-rating pathway.
Mt York deserves attention all right. It stands as a 1.4 million ounce resource in a single pit shell (43Mt grading 1g/t). The mineralisation is of the banded iron formation (BIF) style which makes it different to Hemi, 55km to the north-west.
But as experienced miners will tell you, the style doesn't matter as long as there is plenty of gold to be had. Geological comparisons for Mt York include Karlawinda in the Pilbara and Mt Gibson in the Murchison, the two gold deposits that underpin Capricorn Metals (ASX:CMM) $4 billion market cap.
Major exploration program
Mt York is better grade than both of those but it has a long way to go to catch them in terms of resource ounces.
The biggest exploration program ever undertaken by Kairos is now underway, with a likely first target being to grow Mt York to something more than 2Moz. Helping the cause is pending access for Kairos to a 1500m extension of the mineralisation as it trends into its neighbour's ground – Pilbara Minerals, and its Pilgangoora lithium operation.
An earlier deal between Kairos and Pilbara involved Pilbara agreeing to a $20 million payment for some non-core Kairos tenements. The first $10m instalment is helping fund the record exploration effort at Mt York.
The exploration effort will likely lead to an increased mineral resource estimate update later this year – a sure fire re-rating event.
Kairos could certainly do with a re-rating event. At its mid-week price of 2.8c a share it is has a market cap of $73.6 million. Based on the existing 1.4Moz resource estimate, it has one of the lowest enterprise value-to-resource ounce metrics in its ASX peer group.
That is despite a scoping study in November last year outlining a $276 million project producing 115,000oz annually at an all-in sustaining cost of $2205/oz. Using a conservative $3500/oz gold price, the pre-tax net present value (NPV) was put at $410 million and capital payback was put at 2.7 years.
Gold is now $5100/oz or thereabouts. Plug that into the financial model and Garimpeiro estimates a NPV of around $1 billion and a payback period well short of two years. That makes Kairos' current market look to be on the mean side of things.
That's particularly so when Mt York gets juiced up by the additional ounces expected to come from the big exploration push now underway.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Mount Pleasant coal mine expansion halted after community legal challenge
Mount Pleasant coal mine expansion halted after community legal challenge

ABC News

time23 minutes ago

  • ABC News

Mount Pleasant coal mine expansion halted after community legal challenge

A Hunter Valley community group has won a legal challenge to bring one of the largest coal mine expansions in New South Wales to a halt. In 2022 the Independent Planning Commission (IPC) approved MACH Energy's application to extend the life of its Mount Pleasant coal mine to 2048 and increase its output. The Denman Aberdeen Muswellbrook Scone Healthy Environment Group (DAMSHEG) appealed the approval in the Supreme Court, arguing that the impacts of the project on the environment and climate were not properly considered by the IPC. The NSW Court of Appeal sided with the group on Thursday morning. DAMSHEG president Wendy Wales said it was a "landmark case". "We're just over the moon," she said. The group had requested a judicial review of the approval but that was denied by the Land and Environment Court. The Court of Appeal ruling has rendered the IPC's approval invalid. It will be subject to a review in the Land and Environment Court. The proposed expansion would allow the company to mine an additional 247 million tonnes of coal by 2048. In court DAMSHEG argued that the impact of scope 3 emissions — those created from the burning of exported coal — was not adequately considered. Justice JulieWard ruled there was "nothing" in the IPC's reasoning that showed it had accepted the scope 3 emissions would contribute to global climate change. "Thus, I consider that it has been established that the commission failed to consider a mandatory consideration in this regard," she said. Ms Wales said she wanted the region to move away from reliance on fossil fuels. "We would like to see that Mount Pleasant doesn't go through till 2048, doubling its rate of production," she said. The judge ordered MACH Energy to pay the costs incurred by DAMSHEG for the appeal. The ABC has contacted MACH Energy for comment. The case will now proceed to the Land and Environment Court for a decision on whether the expansion approval should be reversed. The mine employs more than 400 people in the Upper Hunter region and was previously approved to mine until the end of 2026. Ms Wales says bringing new jobs to the Muswellbrook region needs to be the priority. "We need to be working at how we do that and it takes all the collective brains to work towards that," she said. "[Muswellbrook Shire] Council has been calling for much more investment in and attention to how we're going to look after the workers and the rehab of our area."

$385m in funding approved to restore access to the Wolgan Valley near the Blue Mountains
$385m in funding approved to restore access to the Wolgan Valley near the Blue Mountains

ABC News

timean hour ago

  • ABC News

$385m in funding approved to restore access to the Wolgan Valley near the Blue Mountains

The federal and New South Wales governments have approved up to $385 million in funding to restore access into a rural community near the Blue Mountains that has been severely limited for three years. The sole 130-year-old road into the Wolgan Valley was closed in November 2022 after record rainfall triggered multiple landslides. Lithgow City Council made the closure permanent in January 2023, following an engineering firm's assessment of the road's risk. A steep, four-wheel drive track known as the Donkey Steps was established later that month and has been the only access point for residents and visitors since. Wolgan Valley Association (WVA) president Andrew Chalk said the community felt a "huge sense of relief" when the funding approval was announced by the council on Tuesday. "Three years of uncertainty has now been answered with the confidence that we will get some proper means of driving in and out of the valley," he said. Lithgow Mayor Cassandra Coleman said the council was considering multiple options to restore access to the valley, including the construction a new road. Mr Chalk said the prospect of a lengthy wait for a new road was a matter of concern. "On council's time-frame, they're talking about seven years," he said. The Donkey Steps route is unsuitable for heavy vehicles and two-wheel drives, which is less than ideal for the many farmers in the region. "People need to get stock in and out, feed, materials and heavy equipment," Mr Chalk said. "It's just not possible to operate over that extended period." The valley is also a popular tourism destination and several accommodation businesses have suffered due to the closure of Wolgan Road. A luxury resort owned by Emirates has been mothballed since June 2023 and dozens of staff have lost work. Mr Chalk said there were some families in the valley prepared to wait for a new road but most residents wanted the council to fix the existing one. He said he and other community members had sought independent advice from engineering experts who believed the existing road could be fixed in a timely manner. "They [council] have turned what we think is a manageable problem into a giant one," Mr Chalk said. Engineering firm WSP Golder estimated it would cost more than $60m to repair the damaged 2.7-kilometre stretch of road to a level of "marginally acceptable" risk. It recommended Lithgow City Council consider an alternative access route that could provide a more "resilient," "cost effective" and "future-proofed" solution for the valley. The council commissioned investigations into other options and applied for $326m worth of disaster recovery funding last year from the state and federal governments to cover the project. The upper limit approved for the project grew by almost $60 million. Cr Coleman said the council would work with the WVA to deliver a road that worked for the community. "We will take on any feedback they have and we will funnel it through both to Transport for NSW and other agencies that are helping us to deliver this project," she said. The council has commissioned another engineering firm, GHD, to conduct a second risk assessment of Wolgan Road to determine whether it could be temporarily or permanently reopened. In the meantime the council will progress two other new road options through the planning process. "We will be exploring multiple options in regards to what the outcome will be," Cr Coleman said. "The residents down there need certainty, they need access, and we've worked with them and in partnership with [governments] to ensure that this occurs." Transport for NSW said it was committed to restoring access to the valley and would support the Lithgow City Council through technical investigations and project development. "Design and development activities to restore access, which includes confirmation of a preferred alignment, will continue," a spokesperson said in a statement. The council must meet stringent program requirements regarding time and cost-effectiveness throughout the delivery of the project to remain eligible for the funding.

SBS News in Easy English 24 July 2025
SBS News in Easy English 24 July 2025

SBS Australia

timean hour ago

  • SBS Australia

SBS News in Easy English 24 July 2025

Australia has made a major concession to the United States as it bids for tariff exemptions, lifting a ban on US beef. Until now, the ban had applied to beef from cattle who came from third countries, or whose origins whose origins could not be determined. Australian Agricultural Minister Julie Collins says this move is not a compromise in safety and bio-security laws will be upheld. "Our biosecurity risk assessment process is very robust and I have faith in the officials in my department to do this appropriately. These are experts in the field. Australia's biosecurity system is world-renowned for a reason." Two and a half million Australians could be affected by a new bill aimed at protecting penalties for casual workers. Employment Minister Amanda Rishworth is introducing laws to parliament to ensure workers who are required to perform weekend and overtime shifts, are paid around $40 an hour. That rate has been calculated by Fair Work Australia, based on the required time-and-a-half penalty on Saturdays and double-time on Sundays. There will be exceptions based on individual agreements made with workplaces. Prime Minister Anthony Albanese says the move is part of a push to help low-income households. "You know, we want people to earn more and then we want them to keep more of that. So the tax cuts that are coming in will particularly benefit people who are on low and medium incomes." The United States has approved almost half a billion dollars in arms sales, to bolster Ukraine's air defences and combat vehicles. Ukraine and Russian representatives met in Istanbul today in the third round of peace talks that have resulted in a prisoner swap and the repatriation of thousands of soldiers bodies. US President Donald Trump has set a deadline on Russia to negotiate a ceasefire and eventual peace deal, more than three years after it invaded Ukraine. The US is threatening significant sanctions if Vladimir Putin does not make efforts to negotiate. As Ukraine calls on Mr Putin to meet Ukrainian leader Volodymyr Zelenskyy, Russia's delegate for the talks, Vladimir Medinsky, says that won't happen without an existing agreement. ' In order for such a meeting to take place, it is necessary to work out the terms of the agreement in advance, to understand what to discuss at this meeting, and in fact, at this meeting it is necessary not to discuss the agreement, but to put a period, to sign.' Melbourne defender Steven May has been banned from playing in three upcoming matches, in an AFL Tribunal decision overnight. May was found guilty of a charge of rough conduct, graded as careless, severe impact and high contact. Carlton forward Evans had a broken nose and chipped tooth after the impact.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store