Looking for a small-cap Gold play with significant Gold projects, resources and huge potential? Think Lexington Gold
“…Why would a huge company like Harmony want to have to deal with a junior explorer like LEX…”
Lexington Gold (AIM:LEX) continues to establish itself as an international exploration company, complementing a cluster of projects focused on historic US gold mines with rapidly evolving prospects in South Africa’s most prolific gold region.
In the past few months LEX has advanced joint ventures with two established gold miners that promise to supercharge the potential of its extensive stake in South Africa’s historic Witwatersrand gold fields.
The Witwatersand, where LEX holds 89,499 hectares prospective exploration areas potentially resources of over 37 million ounces of gold by virtue of its 76pc holding in White Rivers Exploration Proprietary Limited (WRE), has been the world’s largest gold producing district for more than a century. The region has contributed about 40pc of total global gold production – some two billion ounces – since it was first explored in 1886, and is estimated to host at least an additional 1.2 billion ounces. WRE is backed by founder and significant shareholder Mark Creasy, whose industry-wide reputation was earned when he led the discovery of Australia’s prolific Nova Mine. Creasy is regarded as one of the most successful private mineral resource prospectors in the world. He has backed the management of LEX by injecting WRE into the mix in 2023 and has a long relationship with senior LEX management.
Co-operation agreement with the Gold One Group
Late last year LEX announced a co-operation agreement with Gold One Group subsidiary Gold One Africa, a South African miner with a proven track record in moving low risk high margin precious metal resources projects from exploration to production. Gold One’s flagship Modder East shallow gold mine near Johannesburg, which has evolved from a greenfield exploration site, is the only new mine to have been built in South Africa’s historically rich East Rand Goldfield in the past 30 years.
The agreement opens the way for the prospective partners to share infrastructure, managerial expertise, capital and fund-raising capacities to develop a world-class gold deposit in the region, with a particular focus on consolidating their respective interests in the Ventersburg Goldfield in South Africa’s Free State Province.
Exploration by Gold One at its Ventersburg mining licence, covering approximately 13,837 hectares, has defined a world class 4.31 Moz (million ounces) Mineral Resource, comprising an Indicated Mineral Resource of 23.49 Mt at 3.81 g/t (grams per tonne) gold (2.88 Moz) and an Inferred Mineral Resource of 12.85 Mt at a grade of 3.23 g/t gold (1.33 Moz). Gold One has been drilling very close to the contiguous boundary between LEX, in the South of theirs and in the North of the Gold One prospect. One can only presume that they believe the gold bearing deposits extend into LEX’s prospect thereby enhancing their interest in stitching together an agreement aimed at jointly developing the Ventersburg property. For Gold One, it is clear, they are following their noses and sniff gold on the LEX prospects.
Last month LEX published an independent Exploration Target for its Ventersburg A tenement, adjacent to Gold One’s asset, estimating an exploration potential of 1.39 to 3.55 Moz of contained gold at grades between 2.82 g/t and 3.44 g/t. Potential uranium and silver by-products were also identified at the 19,633 hectare licence. Gold One has already confirmed the presence of uranium and silver on their license.
By working together the prospective partners hope to release the combined potential of their respective interests at Ventersburg. With an established mining plan envisaging a Life of Mine of 17 years and significant infrastructure in place, Gold One’s prospect offers a suitable benchmark for development at WRE’s tenement. And WRE’s database of more than 2,500 historical boreholes across Witwatersand, many applicable to Ventersburg, promises to be a valuable resource for identifying future drilling programmes.
Commenting on the partnership LEX Chairman Ed Nealon said: ‘Our ongoing discussions with Gold One Africa aim to explore and evaluate possible synergies that could enhance the development prospects for the Ventersburg Goldfield. The Modder East mine … has reported an average gold grade of approximately 2.84 g/t in the Indicated Mineral Resource category. As such, the estimated Exploration Target for our Project at Ventersburg represents a potentially higher grade than that reported for the equivalent depth Modder East Mine and therefore represents an exciting development opportunity for Lexington Gold.’
Ventersburg is also close to Sibanye Stillwater Limited’s Robijn Project, which has Indicated Mineral Resources of 13.6 Mt at 5.8 g/t (2.54 Moz gold) and 0.129 kg/t (kilograms per tonne) uranium trioxide, as well as Inferred Mineral Resources of 9 Mt at 5.7 g/t (1.65 Moz gold) and 0.127 kg/t uranium trioxide. Mr Nealon said: ‘The Project’s proximity to established neighbouring operations, notably Gold One Africa’s and Sibanye-Stillwater’s presents unique opportunities for potential collaboration and resource optimisation.’ Areas identified for cooperation would be formalised through a definitive agreement. The combined projects can therefore have a total resource of over 10m ounces priopr to any additional drilling.
Joint Venture with the Harmony Gold Mining Company
The Ventersburg opportunity complements another Witwatersrand partnership that has already been formalised: Jelani Resources, an incorporated Joint Venture (JV) between WRE and Lorraine Gold Mines Limited and Avgold Limited, both subsidiaries of Harmony Gold Mining Company, South Africa’s largest gold producer by volume.
Recently, as announced separately, LEX commissioned Shango Solutions, the in-house geological consultant, to complete an independent study examining the potential of the Ventersburg concession and how it value could be added for shareholders with a view to establishing an exploration target. The study can be seen here https://www.rns-pdf.londonstockexchange.com/rns/4650O_1-2024-12-2.pdf
The venture’s potential was highlighted through the publication last September of an independent Mineral Resource estimate, completed to the 2012 Joint Ore Reserve Committee (JORC) (2012) standard, projecting a total of 6.02 Moz of gold with an average grade of 6.47 g/t. 4.88 Moz at 6.48 g/t gold is located in a Buffer Zone currently held by Harmony, and 1.14 Moz at 6.41 g/t gold is located in the existing JV area (the area covered by the Jelani Resources Prospecting Right), giving net attributable total resources to LEX of 2.72 Mt for 0.56 Moz of gold.
But LEX’s share would increase to 10.78 Mt for 2.24 Moz of gold should the JV parties proceed to future production. According to the terms of the current agreement Harmony will incorporate the Buffer Zone into the JV area if a set of milestones are met, including the completion of a bankable feasibility study, the settlement of commercial terms, and formal approval from Jelani shareholders and Harmony’s management. Given that substantial infrastructure is already in place, shafts, lifts etc from previous Harmony operations, this obviates the need for building shafts down to 1,600m, a very expensive exercise costing many hundreds of millions of dollars, the thresholds for making the Jelani deposits feasible, drops significantly, despite the depth of the deposits. There is a possibility, not confirmed, that Harmony may also have some further deposits it could exploit nearby the JV, thereby making the whole project even more juicy.
With operations in South Africa, Papua New Guinea and Australia Harmony Gold is the world’s leading producer of gold from the retreatment of old tailings dams, making it a major player in the circular economy. The company’s most review of its assets stated gold and gold equivalent Mineral Resources of 137.8 Moz and Mineral Reserves of 39.3 Moz.
Mr Nealon said: ‘The total combined Inferred, Indicated and Measured JORC (2012) Mineral Resource Estimate of 6.02 Moz, at a grade of 6.47 g/t gold in which we have an interest, is a very significant resource and showcases the huge potential of not only the Jelani Resources JV asset but Lexington Gold’s assets in South Africa as a whole.’
Other ongoing progress in South Africa and the US
While progressing its potential partnerships with Gold One and Harmony, LEX has pressed ahead with its other projects in South Africa and the US.
In January 2025, the company published a maiden Exploration Target (JORC 2012) for its Bothaville Project in the Witwatersrand Gold Basin, some 70 km from the established Welkom Goldfield. Based on recent drilling, historical data, and advanced geological modelling the Target reported an estimated 16 to 30 Mt with an average grade range of approximately 3.26 to 6.03 g/t gold, equivalent to 1.7 to 5.8 Moz of gold. Modelling has highlighted further potential for mineral resource delineation, with follow-up drilling planned to upgrade the Target to a Mineral Resource estimate.
LEX CEO Dr Bernard Olivier said: ‘The establishment of this maiden JORC-compliant Exploration Target of up to 5.8 Moz at the Bothaville Project, combined with the existing JORC-compliant Mineral Resources of over 6 Moz across our joint venture with Harmony Gold and the JORC Mineral Resource established for our US projects, firmly positions Lexington Gold as a substantial international gold exploration company.’
Another WRE project, Kroonstad, has the potential to become a major new Witwatersrand field, with an estimated gold exploration resource target of between 6.06 and 62.41 Moz, and a gold grade of between 4.96 g/t and 11.54 g/t. WRE has also compiled a Witwatersrand data base encompassing some 2,500 mother drill holes with associated assays.
Beyond South Africa LEX has continued to define the potential of its gold projects in the US, focused on bringing the latest exploration technology to the Carolina Super Terrane, the site of the first gold rush in the USA (it wasn’t California as most people think, that came in the 1850s and 60s) in the early 1800s. Last year the company recorded promising exploration results at its Jones Keystone Loflin, Carolina Belle and Jenning-Pioneer projects.
LEX is working to clarify the promise of the Jennings-Pioneer Project, a cluster of greenfield exploration prospects next door to the shuttereed Barite Hill Gold mine in South Carolina. Assay results from a soil and surface sampling programme last year targeting gold, silver and base metals identified 13 gossans (targets at surface) within three separate mineralisation trends, yielding evidence of barite, tellurium and other minerals designated as critical minerals by the US federal government. Barite is used in drilling fluids for oil and gas wells, and in paint and in glassmaking, and tellurium is typically employed in solar panels and thermoelectric devices.
Assay results from 495 metres of drill core from three drill holes at Jennings-Pioneer, confirmed ‘the along strike and down plunge continuation of the Barite Hill Trend gold mineralisation’ into the LEX project. All three target zones of the Trend were successfully intersected, finding ‘massive sulphides, semi-massive sulphides and associated quartz barite veins’. Significant intercepts from drill core gold and tellurium assays included 1.14 g/t gold from 127 metres to 150 metres, and 0.80 g/t gold and 60.49 ppm (60.49 g/t) tellurium from 14 metres to 53 metres. Potential by-product intercepts from drill core silver, copper, and zinc assays include 10 metres at 1.33pc zinc, 22.17 g/t silver and 0.11 g/t gold, and 6 metres at 0.52pc copper 13.16 g/t silver and 0.35 g/t gold.
LEX said the results ‘validate our geological models and reaffirm the potential of our regional exploration strategy.’ The results ‘confirmed significant gold and tellurium mineralisation along strike and down plunge of the Barite Hill Trend onto our project area.’ The multi-element assays had also ‘revealed significant by-product mineralisation, including zinc, silver, tellurium and copper, which could enhance the overall economic viability of the project. The presence of broad zones of silica-sericite alteration and intervals of massive to semi-massive sulphides associated with quartz veining and breccia further support the high potential of this exploration area.’LEX also has an interest in the 179.66 acre Jones-Keystone-Loflin Project combining the Jones-Keystone and Loflin Properties mined by small prospectors during the 19th century until the outbreak of the Civil War, and again up to the Great Depression. Pits, trenches, shafts and glory holes at several workings offer evidence of widespread gold mineralisation, with historic grades ranging between 0.5 and 2.5 g/t. Since LEX took over these prospects, two rounds of drilling have taken place which have yielded an JORC Minerald Resource of 210,000 ounces. There are still plenty of drilling targets to be explored.
The company’s Carolina Belle Project, in Montgomery County produced 50,000 ounces of gold until a 1916 dispute between the neighbouring mines ended further exploration and production. 2023 drilling at this site confirmed the extension of the known gold containing veins though more work will be required to firm up a reserve on this prospect.
Outlook
LEX’s share price reflects the company’s positive progress through 2024, rising 11pc over the past year to [4p], taking its market cap to £16.93m. As the Gold One* and Harmony partnerships shift into sharper focus, 2025 also augurs well.
LEX is also positioned to continue to benefit from consistently strong gold prices. Bullion’s value rose 27pc last year. It is currently trading close to its highs. A traditional safe haven in times of economic and geopolitical uncertainty, investors have turned to gold in the face of conflicts in the Middle East and Ukraine, and fears that a loose fiscal policy pursued by the incoming Trump administration will increase inflation, limiting prospects for lower interest rates. Bulk buying by central banks, especially in Asia, seeking to diversify away from the dollar have pushed the price higher still. Worries that Trump’s foreign policies may further exacerbate global tensions are cited by many commentators as a reason supporting current price levels or even higher ones.
In conclusion, this is a very attractive Gold play at an even more attractive share price with the Company entering a transformative new period. One to watch very closely over the coming months, very closely indeed!
Named as one TMS’s 20 mining companies to look out for in 2025 with an impressive portfolio of gold exploration assets across two world-class mining jurisdictions, LEX is one to watch closely over the coming months.
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Here, we take an in-depth view of Lexington Gold. Has the market missed these key points. Click here for article.
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*Gold One is owned by Baiyin Nonferrous Metals Group https://careertag.co.za/gold-one-group-various-position/
