Chalice Gold Mines Ltd (ASX:CHN, TSE:CXN) has entered into an agreement to farm-in to all minerals other than iron ore within Red Hill Iron Ltd’s (ASX:RHI) West Pilbara Gold Project.
Chalice may spend $1 million within two years to earn a 51% interest, at which point Red Hill has a one-off opportunity to contribute to its 49% pro rata interest.
If Red Hill elects not to contribute, Chalice may then spend another $2 million to earn a further 19% within no set time period, or withdraw and retain no interest.
The West Pilbara Gold Project, located 160 kilometres southwest of Karratha in Western Australia, covers 1,390 square kilometres.
The +3 million ounces gold Paulsen Gold Mine, which is owned and operated by Northern Star Resources Ltd (ASX:NST), is located 8 kilometres south-west of the southern extent of the project.
Exploration for gold and base metals across the West Pilbara Gold Project has been carried out since the 1980’s with the most recent work undertaken by Red Hill between 2006 and 2009.
At the Urandy Prospect, drilling has returned a best intercept of 9 metres at 4.52 g/t gold from 46 metres.
Chalice plans to commence an immediate review of all data and undertake a field review of the identified targets.
Mapping and drill programs will follow the review and the Urandy prospects will be prioritised for follow-up drilling.
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