Essex Minerals Inc (CVE:ESX) on Thursday provided an update on its Australian gold exploration earn-in joint venture with KNX Resources Ltd, noting positive findings at the Mt Turner project.
In a statement, Essex said the integration of historical exploration data with initial surface sampling from the Mt Turner project area has defined drill-ready targets in the eastern Drummer Fault zone with the potential to host around a 1 million-ounce gold resource with associated high-grade silver.
READ: Essex Minerals completes initial earn-in obligations on three Australian gold projects
In addition, the company said that the re-interpretation of historical aeromagnetic and ground magnetometer data has highlighted the importance of E-W structures in controlling the precious metal mineralization in the entire Cumberland-Mt Turner region.
This reinterpretation, Essex noted, is significant for several reasons:
- E-W structures played a key role in gold mineralization mined at the historical Cumberland Mine
- The Drummer Fault zone is a major E-W structural zone hosting uranium and gold mineralization
- E-W structures also appear to play an important role at the RBZ South Zone (Cumberland Project) where Hole 1 encountered 18.8 grams per ton (g/t) gold and 160 g/t silver over 6.4 meters (m) from 139.5m downhole, and follow-up Holes 7 & 8 intersected 12.2 g/t gold and 13.4 g/t silver over 0.5 m, and 3.2 g/t gold and four g/t silver over 0.5m, respectively
At the Cumberland Project, the company said additional detailed structural analysis and geophysics will be undertaken to better define the fluid flow and the best trap sites for significant economic gold and silver mineralization.
At the Compass Creek Project, the company said the integration of last year's airborne LiDAR survey with data from previous ground and airborne geophysical surveys has defined three large drill-ready orogenic gold targets.
Another joint venture?
Meanwhile, Essex said that discussions are underway with KNX Resources to acquire their remaining property interests for shares in a separate, jointly owned company (SpinCo). The proposal includes a plan to list SpinCo on the TSX Venture Exchange to fund future exploration on the properties.
"The initial A$1 million of exploration expenditure we have invested in the KNX joint venture has resulted in ownership by Essex of significant equity interests in three large gold and gold-silver projects, each of which have the potential to host multi million-ounce deposits,” said Essex CEO Paul Loudon in the statement. "As the company's first deal where we are incubating advanced stage exploration projects through the option and earn-in joint venture model, we are delighted with the value that has been created and the assets in our portfolio."
He added: "We are now looking carefully at how we best leverage these assets to further maximize value for Essex shareholders, and for this reason we have initiated discussions with KNX Resources on the potential for combining our respective joint venture interests in SpinCo to fund future exploration."
Essex and KNX each own 50% of the Mt Turner property and 41.65% of Cumberland and Compass Creek properties. Essex has the right to offer to acquire all the shares in KNX at independent valuation, or earn an additional 25% interest in Mt Turner and 20% interest in Cumberland and Compass Creek by financing a further A$3 million for exploration.
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