Great Boulder Resources Ltd (ASX:GBR) has signed an earn-in agreement with Mithril Resources Ltd (ASX:MTH) to earn up to 80 per cent of the Lignum Dam Project in WA.
Lignum Dam comprises three exploration licences and abuts the western side of Great Boulder’s recently acquired Whiteheads Gold Project, 60 kilometres north of Kalgoorlie.
“Strategic acquisition”
Great Boulder managing director Andrew Paterson said Lignum Dam was an ideal complement to the Whiteheads project.
He said: “This is a strategic acquisition given its location adjacent to Whiteheads and also the fact that there is potential for both gold and nickel within the area.
“It fits nicely into our exploration strategy – it’s also an easy earn-in deal with no dilution to shareholders.
“We will incorporate the Mithril data into our Whiteheads database and prioritise exploration targets accordingly.
“Mithril has done a lot of good work at Lignum Dam which will give us a good head start.”
Acquisition summary
The key commercial terms of the agreement are:
- Great Boulder has the right to earn an 80% interest in the project in a two-stage farm in;
- Stage-I takes the company to 51% ownership by spending a minimum of $400,000 on exploration over two years;
- Stage-II takes the company to 80% by spending an additional $600,000 over the next two years;
- Mithril’s 20% interest remains free-carried to a decision to mine; and
- The company has a minimum exploration commitment of $120,000 if it decides not to proceed with the farm-in.
Background
The project straddles the boundary between rocks of the Kalgoorlie Terrane to the west and the Kurnalpi Terrane to the east.
Recent exploration by Mithril has focused on the potential for nickel sulphide mineralisation within periodtites with reverse circulation drilling at the Mexi prospect in 2017 intersecting 40 metres at 0.46% nickel.
Previous aircore drilling by Hemisphere Resources in 2008 returned a best intersection of 2 metres at 1.55% nickel from 44 metres in ultramafics at the Drumstick prospect on the west side of E27/538.
Gold potential
In addition to the nickel sulphide potential, the company believes there is potential for gold mineralisation adjacent to Whiteheads.
The Forty Flats prospect at the southern boundary of Whiteheads tenement E27/622 is of interest and any potential for strike extensions to the Lindsays project owned by KalNorth Gold Mines Ltd, which is surrounded by the expanded Whiteheads package.