Kaiser Reef gold hunters find promising signs in old Maldon mines

Kaiser Reef Ltd is arranging for more drilling in the area after finding gold in the Eaglehawk Reef, a structure of underground rock.

Past miners have found a total of 491,400 ounces of gold in that reef alone.

Kaiser has exploration rights to a number of historic mine shafts in an area that has produced 1.7 million ounces of gold over the years.

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Kaiser managing director Jonathan Downes told the Australian Stock Exchange the company was delighted to have found "exceptionally" high amounts of gold compared to rock in drilling so far.

"Maldon is one of the great goldfields and it has received extraordinarily limited modern exploration," he said.

Most of the gold found in the area was uncovered within 300 metres of the surface and Mr Downes said there could be "fabulous" opportunities deeper down.

"We are just warming up in exploring this wholly owned, high grade multimillion ounce goldfield," Mr Downes said.

The company has told the ASX its board considers Maldon to be "one of the most exciting exploration projects in Australia".

One of Kaiser's diamond tipped drill rigs is sitting in one of the deeper sections of a mine known as the Union Hill Decline.

Past miners struggled there because they did not have the pumping technology to deal with underground water that would have flooded their operations, among other challenges.

But modern techniques and an ongoing surge in the amount of money investors are willing to pay for Victorian gold exploration have made Maldon an enticing prospect for Kaiser.

The area is home to the Nuggety Reef gold mine, where past miners dug up some of the highest amounts of gold compared to other rock in Australia.

Kaiser has permission to drill from the surface of Nuggety Reef and the company told the ASX it is now sourcing a crew to work the site.

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Meanwhile, two of the region's largest mining operations have confirmed quarterly results.

Kirkland Lake Gold has revealed its Fosterville mine sold less gold than at the same time last year, down to 146,600 ounces from 154,739 ounces.

The drop was due to digging through rock containing less gold. Kirkland told the Toronto Stock Exchange it had expected that to happen while it works on plans that could expand its Fosterville operations by an extra 10 years.

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At Costerfield, Mandalay Resources said it had strong earnings even as it ran into COVID-19 related shipping complications.

Mandalay said it had dug up about 30 per cent more gold in the latest quarter than at the same time the year before.

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