The inferred resource, which has been estimated using a 0.8gpt cut-off, has been independently verified by Auranmore Consulting.

The resource was the result of a May 2021 drilling program at the Taupo, KZ5 and Parmelia deposits.

The resource sits within 150m of surface and remains open at depth and along strike across all three deposits.

Alchemy CEO James Wilson said the resource established a solid base for growth.

"The current resource footprint covers less than 2km combined of the plus-85km strike length of the Karonie tenement package, which has active mining operations along the length of the same highly prospective structures," he said.

"That leaves a lot of real estate along strike and at depth for future growth."

The phase two drilling program will test the southern part of the project, containing the Challenger, Gilmore and Esplanade targets.

"We will also be targeting high grade gold resources in the far south areas at Karonie where data mining of historical drilling assays has revealed strong potential for high grades close to surface which have not been followed up in nearly 20 years," Wilson said.

Only 10% of the leases have been covered with anything greater than rotary air blast or aircore drilling, which had been proven to be ineffective.

Karonie sits directly along strike of Silver Lake's 585,000oz Aldiss project and along strike to the south of Breaker Resources' 1.4 million ounce Lake Roe project.

The project contains more than 80km of strike extent extending from Silver Lake Resources' Aldiss mine up towards Northern Star Resources' Carosue Dam operation.

Alchemy had A$924,000 in cash at the end of June.

Shares in the company closed at 1.4c yesterday, valuing it at $9.4 million.