Rio said drilling results around Winu had raised the prospect of the “development of multiple ore bodies within one system”.
The exploration success came amid strong prices for copper and gold. The spot price of the precious metal touched a record $US1981.26 an ounce on Tuesday and was tipped to surpass $US2000 an ounce by the end of the year.
The company wants to have Winu in production by 2023 as a building-block operation while drilling continues to flesh out the potential of the Paterson region, where it has mostly wholly-owned tenements covering more than 12,000 square kilometres.
Rio group executive of growth and innovation Stephen McIntosh said the company would be more than happy to build gold mines as long as they met requisite development thresholds.
“The Winu resource itself is probably a little bit more driven by copper than gold,” he said.
“In the orbit around Winu we are starting to see high-grade, mainly gold-dominated mineralisation.”
Mr McIntosh said Rio had carried out exploration drilling on just 2 per cent of its Paterson land package so a lot of work was needed to understand the “ultimate story”.
“We are encouraged already by the fact that within two kilometres of Winu itself we are already seeing very high-grade gold as one new target. Who knows what the next one will turn up?”
The first drill hole at Winu in December 2017 was the discovery hole. The project is only 120 kilometres from Newcrest’s Telfer mine, which had 32 million ounces of gold and 1 million tonnes of copper pre-mining.
Rio mined some 389,700 ounces of gold last year as part of its copper-focused operations at Kennecott in the US, Escondida in Chile and Oyu Tolgoi in Mongolia.
Asked about gold in February, Rio chief executive Jean-Sebastien Jacques said: “If today our exploration teams find a good gold deposit, I think we may keep it in the portfolio. We believe in diversification and gold could be part of it.”
The maiden inferred mineral resource at Winu, reported at a 0.2 per cent copper equivalent cut off, is 503 million tonnes at 0.45 per cent copper equivalent (CuEq).
This includes a higher-grade component of 188 million tonnes at 0.68 per cent CuEq at a cut-off grade of 0.45 per cent CuEq.
In a note to clients, Morgans analysts said Rio appeared to be pushing forward with Winu as quickly as possible and as a top priority.
Morgans said Rio was using a junior miner strategy in starting with a small-scale development targeting the high-grade core before building scale.
Mr McIntosh, a 30-year Rio veteran who is due to retire in September, said the company was very excited about the future of Winu and the Paterson province.
He said Rio’s nearby iron ore operations had not started out at 340 million to 350 million tonnes a year and the Weipa bauxite operations in Queensland and Escondida copper also started off small.
“They all started as much smaller operations and grew both with the market and also with their mineral resource endowment,” he said.