Cyclone Metals Ltd (ASX:CLE) has acquired the Nickol River Mining Project, a tenement package that forms the central portion of the Nickol River Gold Project in Western Australia’s Pilbara region.
The exploration and development stock bought the package from private company D&KD & K Corps Investments Pty Ltd (D&K) for 100 million CLE shares.
In tandem with the acquisition, Cyclone intends to undertake a $1 million capital raise, issuing as much as 200 million shares to sophisticated and professional investors at $0.005 per share.
The ASX-lister will use the cash injection to support its proposed work program at the Nickol River project, cover acquisition costs and provide general working capital.
Groundwork imminent
Cyclone non-executive chairman Terry Donnelly said: ” This is a small but significant acquisition in a very desirable location for gold.
“We will commence work on the ground immediately.”
In the short term, Cyclone hopes to undertake a sub-audio magnetics (SAM) geophysical survey over the project’s tenements, targeting primary structures that could lay host to gold mineralisation.
Notably, there is a thin veneer of up to 4 metres of cover that has impeded early time explorers since gold activities started in the area in the nineteenth century.
Based on the results and the company’s ability to delineate structural targets, a reverse circulation drill program will follow, targeting mineralisation from the surface to 100 metres deep.
Nickol River Project
Cyclone’s latest acquisition comprises seven granted mining leases, five miscellaneous licences and a water licence.
The exploration asset lies within the Karratha Terrane on the north side of the Sholl Shear Zone, near the margin of the Karratha Granodiorite.
Hopeful prospectors have explored the asset’s tenements and surrounding regions for gold since 1889.
Most recently, tenement M47/1527, which is partly surrounded by tenements M47/127 and M47/401, has been drilled by a series of owners and alluvial gold mined by its present owner, fellow ASX-lister Artemis Resources Ltd (ASX:ARV, ASX:ARV).
Despite this, no substantial modern exploration or drilling has been carried out on the Nickol River Project tenements.
Post settlement, D&K will retain rights to mine free digging, gravel-like materials including gravel, sand and other material commonly used for roadworks, earthworks, construction and the like on the tenements under its gravel rights.
Acquisition terms
In order to finalise the Nickol River Project takeover, Cyclone will issue D&K 100 million fully paid ordinary shares under its existing placement capacity.
It will also hand over a $200,000 facilitation fee to Rich Minerals Pty Ltd as thanks for setting up the transaction.
For the acquisition to go through, Cyclone and D&K must enter an agreement that solidifies the seller’s gravel rights and ties up the deal’s fine print.
Cyclone believes the acquisition will settle in the coming weeks.