Liontown Resources (ASX: LTR) has inked a deal to acquire the remaining 34% interest in the Jubilee Reef Gold Project in Tanzania from joint venture partner Currie Rose Resources, giving Liontown full ownership of the project.
The company said consolidating ownership of the project was an important factor in being able to manage future exploration as effectively as possible.
Consideration for the 34% interest is the issue of 12 million Liontown shares, which were last trading at $0.018 – valuing the share issue at $216,000, and a cash payment of up to US$120,000 (A$116,427) for any transaction costs.
The Jubilee Reef Project is located about 850 kilometres northwest of Dar es Salaam within the Lake Victoria Goldfield of northern Tanzania.
This is an Archaean greenstone-granite terrain which hosts several multimillion ounce gold deposits including African Barrick’s Bulyanhulu deposit and AngloGold Ashanti’s Geita deposit.
Since starting work on the Jubilee Reef Project in mid-2011, Liontown has drilled a total of 22,296 metres of reverse circulation, diamond and aircore drilling.
Extensive gold mineralisation has been discovered near some of Tanzania’s largest gold mining operations.
The Jubilee Reef Project abuts tenements owned by African Barrick Gold, Tanzania’s largest gold miner.
Three advanced prospects – Masabi Hill, Panapendesa and Chela – have been delineated to date with more to be tested and strong potential for a large scale gold discovery.
Broad, near-surface gold zones have been intersected at Masabi Hill and Panapendesa.
Better intersections, at Masabi Hill in particular, comprise 50 metres at 1.8 grams per tonne (g/t) gold from 40 metres, including 27 metres at 2.8g/t gold; 62 metres at 2.4g/t gold from 70 metres, including 21 metres at 4.7g/t gold; and 86 metres at 1.7g/t gold from 9 metres, including 44 metres at 3g/t gold.
At Masabi Hill, early results have highlighted the potential for repeats of nearby gold deposits.
The gold anomalism remains open, with the potential for a large gold system with multiple lodes.
A review of all data is well advanced and planning is underway for field work to be undertaken once the northern Tanzanian wet season has ended.
New agreement terms
Under the terms of the existing Jubilee Reef joint venture agreement, Currie Rose would receive a 3% net smelter royalty upon its interest being diluted to 5%.
Under the new agreement, Currie Rose will now receive a 2% net smelter royalty on future gold production from the Jubilee Reef Project.
Liontown will have the option to purchase the 2% net smelter royalty in the event that a Preliminary Economic Assessment is completed for a resource in excess of 250,000 ounces of gold or gold equivalent.
At the end of the March quarter 2013, Liontown’s cash balance was about $1.4 million.
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