Empire Metals Ltd (LON:EEE) revealed it has an option to acquire a 75% interest in four exploration licences that comprise the Central Menzies gold project.
Empire paid A$250,000 in cash plus A$100,000 in newly issued shares (at an assumed price of 2.85p per share) to acquire the option, which lasts for nine months.
Empire has agreed to spend A$500,000 on exploration at Central Menzies within the nine-month option period. It can exercise the option to acquire the 75% stake by paying A$1.75mln in cash and a further A$1.75mln to be satisfied through the issue of shares at a 10% discount to the prevailing 30-day volume-weighted average price.
The project, in Western Australia, is located in one of the region's major productive gold fields, is serviced by the Goldfields Highway, has access to power and water and is also within trucking distance of many gold processing plants.
The project lies within a classic granite-greenstone belt, with mineralisation associated with the regional Menzies Shear Zone, Empire Metals said.
Gold-bearing quartz veins occur along the contact between basalts and sediments, it added. A series of structurally controlled high-grade gold deposits have been historically mined and display extensive exploration potential for high-grade extensions.
"We believe that the gold mining industry in Western Australia offers tremendous opportunity and we are delighted to be able to extend our mineralised footprint in the region with this highly prospective asset, located 90km north-west from our Eclipse gold project,” said Shaun Bunn, the managing director designate of Empire.
"Central Menzies is early-stage but has a great address and offers the potential for near-surface high-grade gold mineralisation, as evidenced from the significant historical gold production along the same mineralised trend, and the results of exploration within the licence,” Bunn said.
“The project has been held for several years by Mel Dalla-Costa and we are confident that we can now add significant value with relatively simple and inexpensive exploration to define the locations, extents and grades of the mineralised structures to give a tangible sense of the resource potential of this prospect. We are in a strong financial position to move forward with initial exploration work and we look forward to providing more information in due course,” Bunn added.