Two rocks containing gold found at RNC Minerals mine in Western Australia, September 10 2018. Picture: TWITTER/@CECILIAJAMASMIE
Two rocks containing gold found at RNC Minerals mine in Western Australia, September 10 2018. Picture: TWITTER/@CECILIAJAMASMIE

A Canadian company has unearthed two large gold-encrusted rocks at an underground mine in Western Australia, which geologists say amount to a "once-in-a-century discovery".

RNC Minerals said on Monday it had found a 95kg stone containing 2,440oz of gold and a 63kg specimen containing an estimated 1,620oz at its Beta Hunt mine in Western Australia. Over a week the company said it had mined 9,250oz of high-grade coarse gold worth C$15m, including the encrusted rocks that it claims could rank among the largest gold discoveries to date.

"This is a spectacular discovery — possibly the find of the century in the Australian gold fields," said Ross Large, professor of geology at University of Tasmania.

"This is the sort of find that you would associate with the 1860s Gold Rush and will probably cause a boom in exploration," he said.

Shares in RNC closed up more than 94% at 18 Canadian cents on the Toronto Stock Exchange following the news, giving the junior miner a market capitalisation of C$65m ($49m).

Australia’s Gold Fields have produced many of the world’s largest gold nuggets, including the 72kg nugget Welcome Stranger, which was unearthed by prospectors John Deason and Richard Oates in Victoria in 1869 during the gold rush.

The discovery by RNC almost 150 years after that discovery comes amid a resurgence in Australia’s gold industry, with companies ploughing a record A$223m ($158m) into exploration in the June quarter — up 16% on the same period a year earlier.

"Exploration is going well due to a strong Australian gold price, particularly brownfield exploration" said Warren Pearce, CEO of the Association of Mining and Exploration Companies. "But this RNC find is a bit of an exception — it’s hard to think back to a discovery like this."

RNC began a sale process for its Beta Hunt mine in March before this latest discovery. The company said because of the significance of the discovery it was no longer in exclusive discussions with a preferred bidder for the assets, which is a gold and nickel mine. RNC said it had decided to consider all alternatives, including a sale to maximise the value of Beta Hunt to its shareholders.

Sam Spearing, director of the Western Australia school of mines at Curtin University, said the discovery at Beta Hunt was very unusual because of the huge concentration of gold found. He said miners typically extracted 2g-12g of gold per tonne of rock mined while RNC had found 2,200g per tonne. "This is a very rare occurrence and sure to pique interest in the area."

The price of gold has fallen 12% to below $1,200/oz from a peak in January of $1,358. A strengthening US dollar and rising short-term interest rates from the US Federal Reserve in 2018 has weakened the appeal of holding gold.

© The Financial Times 2018