Catalyst Metals Ltd (ASX:CYL) shares have gained after the company signed an earn-in deal covering exploration and mining licences surrounding the Toolleen and Golden Camel gold deposits east of the Fosterville Gold Mine in Victoria.
The agreement with Golden Camel Mining Pty Ltd will see Catalyst take up to a 50.1% interest in two exploration licences by spending $650,000 on exploration over the next five years.
Shares increase again today
Catalyst gained 12.3% on Monday to close at $1.32 and today has increased another 4.5% to $1.38.
In addition, Catalyst will have the option to purchase a 50.1% interest in two mining licences in the area where Golden Camel has been mining at the Golden Camel mine.
This part of the agreement involves Catalyst purchasing the interest for $1 million after shelling out a further $350,000 and completing 1,200 metres of diamond or reverse circulation pre-collar at the Toolleen and Golden Camel mines.
Catalyst can then acquire a stake of up to 100% by dilution, depending on Golden Camel’s contribution.
RAB drilling planned
With the exploration licences, Catalyst must spend at least $55,000 on phase I exploration by the end of this quarter.
The company has planned a shallow percussion rotary air blast (RAB) drilling program, which is expected to start next month.
Catalyst expects to then decide whether it should proceed to a second, earn-in phase.
‘Future producing assets’
Catalyst reported yesterday the agreement with Golden Camel would give it “potential share of production from small gold deposit at Golden Camel”.
The licences cover a known gold trend, with the land covering a 25-kilometre strike length with known gold mineralisation and prospective horizons.
Golden Camel managing director Dean Pontin said: “If Catalyst elects to earn in, then the skill sets of both companies can be used to develop currently identified prospects within the tenements into future producing assets.”
Catalyst’s earn-in partner has produced 7,000 tonnes of ore during trial mining, having 6,000 tonnes grading 3.5 g/t gold treated offsite.