Peel Mining (ASX:PEX) has revealed that ASX gold producer St Barbara (ASX:SBM) has taken a 9.5% stake in the company by subscribing for $3.28 million worth of placement shares.
The placement shares will be issued at $0.205 and increase Peel’s net cash position to more than $5.3 million.
The funds raised via the placement will allow for the acceleration of upcoming work programs including further drilling at Peel’s 100%-owned Wagga Tank VMS prospect.
Drilling at Wagga Tank is scheduled to recommence in April.
Rob Tyson, managing director, commented: “We are pleased to welcome a company of the calibre of St Barbara to the share register.
“St Barbara’s funding commitment provides further validation of our strong belief in the mineral potential of the Cobar Superbasin.”
Background
Peel’s projects cover more than 5,000 square kilometres across New South Wales and Western Australia.
Projects include:
- Mallee Bull: An advanced copper polymetallic deposit that remains open in many directions;
- Cobar Superbasin: Farm-in agreement that offers funded strategic greenfields exploration potential along with the new Wirlong copper discovery;
- Wagga Tank: A polymetallic VHMS-type deposit with many significant intercepts;
- Apollo Hill: Exploration project that hosts a major, protruding, shear-hosted, gold mineralised system that remains open down dip and along strike; and
- Attunga: A high grade tungsten deposit.
Wagga Tank
Wagga Tank is located 130 kilometres south of Cobar and 50 kilometres from Mallee Bull.
The project has been effectively landbanked by majors since last drilling in 1989.
42 historical drill holes included highlights of:
- 32 metres at 3.00 g/t gold, 24 g/t silver from 10 metres;
- 20 metres at 3.11 g/t gold, 63 g/t silver from 28 metres;
- 25.9 metres at 8.74% zinc, 3.39% lead, 82 g/t silver from 141.6 metres;
- 15.7 metres at 10.39% zinc, 4.43% lead, 69 g/t silver from 215.6 metres;
- 24 metres at 2.73% copper, 0.56 g/t gold, 13 g/t silver from 86 metres; and
- 20.3 metres at 2.17% copper, 0.76 g/t gold, 9 g/t silver from 184.4 metres.
Peel’s maiden 18-drillhole program targeting primary mineralisation confirms historical data and 7 holes require extension.
Highlights included:
- 12 metres at 3.09% copper, 97 g/t silver, 1.36 g/t gold from 92 metres;
- 8 metres at 8.54% zinc, 6.20% lead, 134 g/t silver, 1.45% copper from 173 metres;
- 27 metres at 10% zinc, 6.41% lead, 89 g/t silver, 0.42 g/t gold, 0.21% copper from 240 metres;
- 15 metres at 8.5% zinc, 4.11% lead, 114 g/t silver, 1.57 g/t gold, 0.3% copper from 280 metres;
- 17 metres at 2.65 g/t gold, 0.54% copper, 11 g/t silver from 211 metres; and
- 16 metres at 3.27 g/t gold, 0.35% copper, 1.1% zinc, 0.57% lead, 12 g/t silver from 226 metres.
Analysis
Attracting a company with the profile of St Barbara highlights the value of Peels portfolio of projects.
Significantly, the placement was conducted at a premium to the previous trading price.
Peel will be able to draw on St Barbara’s extensive experience in deep, underground gold mining at Gwalia.
This technical expertise is highly applicable to Cobar-style deposits, which typically show strong vertical continuity.
Peel is entering a busy period of exploration which secures upcoming exploration based news flow for shareholders.
Drilling at Wagga Tank is scheduled to recommence in April. Elsewhere, drilling is continuing at the JOGMEC-funded Wirlong copper discovery, while drilling recommenced last week at the T1 prospect at Mallee Bull targeting very high-grade zinc-lead-silver mineralisation for metallurgical test-work purposes.
Shares are up 26% after being released from their trading halt today.
During March 2017, a drill intersection at Wagga Tank was recognised by RSC Mining and Mineral Exploration as one of its 10 significant global drill results of the month.