Dragon Mining (ASX:DRA) will trade higher after it exercised its right within the Harpsund farm-in and joint venture agreement with Botnia Exploration (BOTX:Stockholm) to acquire a 60% interest in the two Harpsund licenses in Sweden.
The Harpsund area is located immediately adjacent to Dragon's Svartliden production centre in northern Sweden, four kilometres northeast of the Svartliden Gold Mine.
Dragon's interest will translate to 60% following expenditure of $750,000 during the exclusivity and initial earn-in periods, and Dragon have also advised its intention to advance to the final earn-in phase where it can earn an additional 20% by spending a further $500,000 by the 27 October 2015.
Two contiguous permits encompass an area of 4,423 hectares, covering prospective geological sequences similar to those that host the Svartliden gold deposit.
Systematic exploration during the initial earn-in period included a heli-borne geophysical survey, geological mapping, geochemical sampling and diamond core drilling, which collectively improved the structural understanding of the area
and identified primary rock-hosted gold in four different areas, including the Sjöliden target.
Drilling at Sjöliden has returned several noteworthy results including 2 metres at 14.03 grams per tonne gold.
The proximity to Dragon's existing gold deposit and processing facilities is significant; upon economic discovery it would allow increased production and revenues with a minimal increase in capital and operating expenditure.
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