Zenith Minerals and a golden girl named Dulcie

Not long ago, when the explorer Zenith Minerals (ASX: ZNC) was telling investors what to pay attention to, high on the list of potentially valuable projects was Split Rocks Lithium Project in the Forrestania Greenstone Belt of Western Australia. These days it isn’t Split Rocks, it’s the Dulcie Gold Project. It turns out that they’re in more or less the same place, around 80 km south of the town of Southern Cross.

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Not lithium, but gold

The Dulcie story dates back to mid-2016, when Kidman Resources was just beginning to realise the lithium riches of its Mt Holland Project around 100 km south of Southern Cross. That’s the project that Wesfarmers paid $776m to own back in 2019. Around the same time Zenith Minerals started pegging ground around 10 km from Earl Grey, the foundation lithium deposit of Mt Holland, and called it Split Rocks.

By 2018 it had grown that project to around 500 sq km, and part of the tenure lay close to a small, privately-owned heap leach gold operation called Dulcie. Zenith optioned this ground in early 2019 and by mid-2023, shortly after exercise of the option, had a maiden resource at what it now calls Dulcie Far North.

That maiden resource was small, with only 3.4 million tonnes at 1.4 g/t gold for 150,000 ounces inferred, but with the mineralisation open along strike and down dip there were hints that another potential million ounce plus deposit like Bounty, Marvel Loch, Yilgarn Star and Edna May was in the neighbourhood. Bounty, which was discovered in the mid-1980s, was a 2 million ounce producer between the late 1980s and the early 2000s.

A rising resource

In mid-2024 Andrew Smith joined as CEO, and the time was right to focus on where Dulcie could go to. Lithium was going nowhere fast whereas gold had made it to US$2,500 an ounce. Another drilling programme at Dulcie Far North bumped the inferred resource to 5.1 million tonnes at 1.3 g/t gold for 210,000 ounces in December 2024, and after 37 RC holes earlier this year Dulcie Far North increased yet again, in June 2025, to 8.2 million tonnes at 1.15 g/t gold for 302,000 ounces.

Also in June 2025, Zenith acquired a subsurface exploration and mining rights (below 8 metres depth) over a package of Mining Licenses in the Dulcie neighbourhood. This opened up Dulcie to modern exploration in an area where Zenith’s geologists could define an exploration target of 300,000-800,000 ounces.

The company raised $3.5m in a rights issue at 3 cents per share and got ready for another 12,000 metres of RC. That drilling is expected to kick off late this month and has potential to put Zenith back on the equity market map as 2025 finishes up.

Painting the Mountain Red

Dulcie isn’t the only project in Zenith’s portfolio that it expects can contribute in the near term. A project called Red Mountain, around 120 km west of Bundaberg in the same area that hosts Aeris’s Cracow Gold Mine and Evolution’s Mt Rawdon Mine, has been tantalising since 2017 with great exploration results, including some visible gold in one 2020 drillhole.

Zenith’s geologists have had trouble, however, figuring out what kind of deposit they’re looking for. They now think Red Mountain is an intrusion-related gold system like Resolute’s old Mt Wright Gold Mine near Chartered Towers, which was good for close to a million ounces of production, and with the support of a Queensland Government Collaborative Exploration Initiative grant — a clear signal of policy backing for the project — the latest round of deep diamond drilling has been designed to test that thesis. High-grade intersections at depth in the forthcoming results could potentially give this project a new lease of life..

Then there’s the multitude of other projects that Zenith is holding on to. Split Rocks, which Zenith now calls the Rio Lithium Project, now has an inferred lithium resource of 11.9 million tonnes at 0.72% LiO2. Any time Wesfarmers and SQM start making out well from Mt Holland in the next lithium boom, Zenith stands to benefit.

And then there’s Earaheedy, 110 km north of Wiluna. This lead-zinc project, now the flagship for Rumble Resources (ASX: RTR), has an inferred resources of 94 million tonnes at 3.1% combined lead and zinc and 4.1 g/t silver containing 2.2 million tonnes of zinc, 0.7 million tonnes of lead, and 12.6 million ounces of silver. Zenith has a 25% free-carried interest in Earaheedy through to Bankable Feasibility, and once upon a time investors valued this project in the hundreds of millions. The next bull run for lead and zinc could likely give this project a shot in the arm, especially with silver now way back in favour.

More drill holes at Dulcie to come

But to return to Dulcie, where the action is likely to be for the remainder of 2025. If Dulcie turns into something significant that is open-pittable, we expect the economics will be good.  About 30 km by sealed road to the north is Marvel Loch, the old St Barbara gold mine, owned since 2017 by the Chinese miner Shandong Tianye via its subsidiary company, Barto. The Marvel Loch mill is understood to be short of ore so it’s a reasonable assumption that owner would likely pay generously for feed.

During Dulcie’s last 37-hole programme Zenith was getting intersections like 6 metres at 2.76 g/t gold from 57 metres and 5 metres at 2.19 g/t gold from 97 metres Dulcie Far North sits in just a small part of shear zone with at least seven km of strike and what looks like multiple stacked lodes. That makes Zenith confident that the next round of drilling can even better numbers than before. And quickly too, given that two rigs will now be on site. Zenith anticipates another resource upgrade before the year is out. Ahead of that, investors excited about US$3,500 an ounce gold ought to pay attention.