Catalyst Metals (ASX: CYL) has entered into a memorandum of understanding with Providence Gold and Minerals Pty Ltd, a private company, to form a joint venture to further explore and develop the Four Eagles Gold Project, north of Bendigo in Victoria.
The project (EL4525) is located generally along strike of the Bendigo Goldfield and west of the towns of Mitiamo and Raywood in central Victoria and has the potential to be a repeat of the historical Bendigo gold field which has Australia’s second highest historic gold production after Kalgoorlie.
Previous widely spaced reconnaissance aircore drilling has intersected 6 metres @ 82g/t Au and 3 metres @ 9.7g/t Au and a gold anomalism has been demonstrated over a strike length of ten kilometres and a width of three kilometres.
Aircore drilling by Providence Gold has intersected high grade gold mineralisation and defined a prospective structural corridor over 10 kms in length.
This trend lies along strike, 15 kms to the north of the Tandarra gold occurrence located by Leviathan Resources. Best results from the drill program included:
- 6 metres @ 82g/t Au from 123 metres in FE 328; and
- 3 metres @ 9.7g/t Au from 120 metres in FE 380.
This ground remained relatively unexplored until recent times as the alluvial cover precluded the discovery of gold by previous explorers without the use of modern geophysical tools.
Catalyst intends to conduct further drilling and geophysics to better define the high grade results whilst also defining the gold mineralisation within the known ten kilometres of gold anomalism.
The formation of the joint venture will be subject to due diligence being conducted by Catalyst and a binding heads of agreement being prepared and signed by Catalyst and Providence Gold. Subject to satisfactorily completing documentation, work may commence early in 2011.
The joint venture will be structured in three phases giving Catalyst the opportunity to earn a 75% equity interest in the project over a 5 year period by expenditure of $4 million, with an initial $400,000 expenditure required in Year 1.
After the initial 12 month option period, Catalyst may earn an initial 50% interest in the project area with an opportunity to ultimately earn the 75% equity on hard rock deposits.
At each phase, Providence Gold will receive payments of cash and shares in Catalyst to reimburse its previous costs.