In the meantime, a record gold price also provides it with an opportunity to become a self-funded explorer through toll treatment of some of its smaller deposits like Catherwood, not to mention the 500,000t grading 1.2 grams per tonne gold for a contained 19,000oz it has in existing surface stockpiles.

“We would hope to have a deal done on toll milling by the December quarter which would deliver cash to us by the March quarter next year,” Phoenix Gold managing director Jon Price told MiningNewsPremium.net.

The company has not only grown resources by 62% since the start of this year to 1.4Moz from 24.08 million tonnes of ore grading 1.80gpt, but also grown its holdings along the Zuleika Shear to 16 kilometres from 4km previously.

In the meantime, it continues to canvass other opportunities, particularly from private players in the region with smaller holdings.

“We are now becoming the natural owner for a lot of projects,” Price said.

Its internal target was to define 1.5Moz in resources by the end of the year but its potential move to toll milling was an easy decision to make given the rising price of the precious metal, which many believe will hit $US2000/oz in the not too distant future.

“Our discussions with other plant operators in the region are quite advanced and there are four mills in the area, one of which is under construction and another on care and maintenance,” Price said.

“Obviously, it would make more sense to go with someone with an operating mill and existing mining fleet.”

As for the group’s longer term aspirations where it is targeting 1Moz in resources at each of its three gold camps – Castle Hill, Broads Dam and Ora Banda, all located north of Kalgoorlie-Boulder – Price said ultimately Phoenix was targeting a plus 100,000oz per annum operation over at least a seven year mine life.

Already, a feasibility study based on development of the Catherwood resource has returned positive economics and confirmed it could generate free cash flow of $A15.6 million.

The deposit falls within the company’s Kunanalling gold project area and is capable of producing 25,300oz, which equates to a 12-month life, from the treatment of 314,000t of ore grading 2.7gpt gold at total cash costs of $881/oz.

However, others that could just as easily fall under the toll treatment banner include Nazzaris, Rayjax, Emu, Premier and Blue Bell.

To drive its $9 million exploration efforts in the coming 12 months, shareholders are due to vote on the second tranche of a $3.7 million capital rising on Friday.

A further $7.2 million is due to come in on February 28 if options issued as part of the company’s initial public offering are exercised.

“When you combine that with the cash from the raising we are well funded for the next 18 to 24 months,” Price told MNP.

In fact, the company’s exploration burn rate represents a tripling of its search budget, with around 70,000 metres of drilling planned.

Since its listing in December Phoenix has spent around $3 million exploring its holdings.

Rayjax is shaping up as Phoenix’s second toll milling source given its 4-5gpt material and its location, being only 12 km southeast of Catherwood.

“But really we have a number of choices,” Price said.

Interest has also been shown in the soft or oxide material on the company’s holdings.

“We have had approaches from others relating to our softer [oxide] ore, so hopefully we can get some win-wins and make cash from that to again go back into drilling,” Price said.

For here and now, infill drilling is being undertaken at Broads Dam, with two reverse circulation rigs in operation, while Castle Hill will be the next in line as drilling looks to shore up its lateral extent, which at this stage remains open.

The key to its exploration success, apart from its people, says Price, has been the consolidation of up to six different databases into one dataset.

“We also spent a whole year prioritising targets and honoured the geology,” he said.

Mineralisation is linked to the main geological features of the Zuleika and Kunanalling shear zones and Phoenix’s theory is that cross cutting structures act as the feeder zone for the gold.

“Interestingly, at Kunanalling, which historically has been dubbed a large tonnage but low grade system, we have found Zuleika-style lode systems [with] high grade 7-8gpt material abutting the lower grade areas,” Price said.

“So that is quite exciting, especially from areas where people thought there was no gold.”

Targets identified for immediate follow-up included the strike extension between the Blue Funnel and Broads Dam deposits, the southern strike extent of Blue Funnel and parallel zones of mineralisation within the Zuleika corridor.

At Castle Hill, work will focus on the untested strike extension between the Mick Adam and Wadi areas, along with infill drilling of the Lady Alice trend, while Ora Banda will be next in line.

New discoveries may also be a feature as demonstrated by the maiden resource for the Backflip deposit of 93,000oz grading 2.5gpt gold.