The release in mid-2008 of a Inferred gold resource for the Chewton Deposit was a major milestone in the short history of Castlemaine Goldfields Limited. The status, activities and strategy at that time going forward were summarised as follows:-

  • The most extensive 3D exploration model has been developed for the Castlemaine goldfield and subsequently validated by structural drilling.
  • Numerous drill targets have been generated, the first drilled of which became the Chewton Deposit.
  • An inferred resource of 686,000 ounces was discovered for just over $4/oz.
  • The market capitalisation was less than $20 a resource ounce.
  • The extensive drilling program was completed in early 2009, ahead of schedule, under budget and having produced highly encouraging outcomes.
  • Drilling associated with the Chewton Deposit discovery is evidencing the broader potential for the Wattle Gully/Chewton area.
  • Similar potential is seen in the Quartz Hill area just south of the pine plantation.
  • Successful outcomes will result in a new inferred resource estimation in the future.
  • A discovery in the northern part of the goldfield is thought to be the quickest route to production and cash flow. Hence the focus of drilling in later 2008 upon the Cappers project.

Castlemaine Goldfields Limited is clearly focused and confident of defining a substantial gold resource inventory within the Castlemaine goldfield. This resource inventory will dictate the route to production and cash flow. The announcement on 2 June 2008 of a JORC Code compliant Inferred Mineral Resource of 686,000 ounces was a major first step. The size of the inaugural estimation of mineral resource places it within a handful of major new discoveries in Australia in recent years. This resource was discovered at a very low cost of just over $4/oz.

The release of this resource coincided with the winding up of an extensive 16,000 metre diamond drilling program across the goldfield that commenced about October 2007. Including previous drill campaigns at Castlemaine this drilling more than doubled the amount of geological information available in the goldfield and produced highly encouraging outcomes, over and above the resource within the Chewton Deposit. The regional structural drilling component of this extensive program validated the earlier geological modelling and generated targets along the central corridor that extends some 12 kilometres north-south. It has also verified that the mineralisation model being used to explore the goldfield is correct.

Having defined the Chewton Deposit resource, the focus of attention moved to the north of the goldfield. Drilling to date has highlighted two outstanding projects, the first just south of the pine plantation around the Quartz Hill area and the second within the pine plantation. The Quartz Hill area is on the northern portion of the central geological corridor lying in between the historical alluvial workings described as being "the richest shallow alluvial gold field in the world". 

Comprising the North Quartz Hill, Merthyrn, Manchester and Englishman's grouping of prospects the Quartz Hill project shows potential for a multi-million ounce camp of prospects not dissimilar to the Wattle Gully/Chewton camp of gold resources. Drilling at the North Quartz Hill prospect to date has intersected gold mineralisation which is similar to that known for the Wattle Gully gold mine.

Further drilling is required to follow up the encouraging results at Cappers, near Specimen Gully in the far north of the pine plantation. This drilling will advance the economic assessment of open pit potential from shallow gold minerlaisation and definition drilling to determine the extents of the Shicer fault mineralisation.

The two 120m spaced intersections of the Shicer fault under the old Cappers mine will be followed up in future drill campaigns as new drilling is proposed for areas along strike of the fault which have previously never been tested. The Shicer fault is seen as a major conduit for gold fluids and can represent an exploration target with a strike length that extends the full 12km of the goldfield.

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The discovery of gold in the northern part of the Castlemaine field at shallow depths would readily facilitate the development of a decline from within the pine plantation that would drive south to exploit the northern deposits en route to Chewton/Wattle Gully.

Development within the pine plantation is seen as the most appropriate, and likely to be the quickest, means of establishing a cash flow. It is also considered most likely that, following successful exploration and mine development, ore from the early stages of production would be toll treated within the district. This would help keep front end capital down and facilitate the appropriate sizing of subsequent mill capacity to meet the supply of a steady rate of ore at targeted grade.

Drilling is planned at Quartz Hill and Cappers projects. The objective is to assess the gross potential of this highly prospective area at the earliest time possible. Favourable outcomes would see further resource scale drilling and, if successful, the results of a new inferred resource estimate released thereafter.

No further drilling is being planned to add incrementally to the Chewton Deposit in the short term. However studies of the Wattle Gully/Chewton deposits have highlighted the potential for new discoveries both to the north and south of Wattle Gully and the potential for this area to host multi-million ounces in its own right.

Mineralisation is found at South Wattle Gully, 800m south of the mine development where faults intersect both the West Wattle Gully and Wattle Gully anticlines. This prospect is evidence of the potential southern continuation of the Wattle Gully mineralisation.  Over time drilling programs will be developed and conducted to test both the northern and southern potential around Wattle Gully/Chewton.

All new drilling information is periodically used to update the Exploration 3D model which is in turn used to re-prioritise drill targets and programs. Exploration to date on the Castlemaine goldfield has met with outstanding success. There is every expectation that the discovery at Chewton can at least be replicated several times over within the goldfield.

Work is ongoing to define which of the possible access options into the underground resource at Chewton will first produce a cash flow and be used to build the largest inventory of gold resources in the goldfield. Castlemaine Goldfields Ltd believes it will rapidly move to the point of defining which pathway to production is most beneficial to it's stakeholders following the next phase of prospect drilling on the field.