Okapi Resources Ltd (ASX:OKR, FRA:260) has elected to proceed with acquiring the Enmore Gold Project in northern New South Wales after satisfying a series of expenditure and drilling requirements.
The gold explorer first tabled its play for the precious metals asset in December 2020, when it entered a binding heads of agreement with Providence Gold and Minerals Pty Ltd.
However, to complete the acquisition, Okapi was required to tap into the project’s untested potential by expending $200,000 and completing at least 1,000 metres of reverse circulation (RC) drilling.
Fast forward to September, and Okapi achieved these milestones, meaning it will hand over $300,000 worth of OKR shares to the vendor to earn its 100% stake.
Major exploration potential
Speaking to the gold play’s potential in December, Okapi chairman Rhoderick Grivas said: “This allows Okapi shareholders to gain access to an exciting under-explored gold project that brings significant value potential to the company.
“Okapi has undertaken preliminary due diligence and identified targets with significant scale potential that are ready for further exploration to refine drill targeting in the short term.”
Indeed, part of Enmore’s attraction was its exploration potential — the gold play has seen limited historical evaluation across its 135-square-kilometre exploration licence.
However, previous rock chip sampling encountered widespread high-grade gold, returning as much as 74.1 g/t.
Historical sampling of underground workings also bears promise, with a 0.45-metre intersection at 234 g/t gold uncovered.
Gold was first discovered in the Enmore area in 1876 and intermittently mined till 1940.
Most of the previous exploration targeted very shallow mineralisation, with roughly 233 holes completed before Okapi’s involvement.
Breaking it down, 153 of the drill holes went less than 50 metres deep, while just 41 drilled down more than 100 metres.
Turning the soil at Enmore
In terms of prospect potential, Enmore boasts two advanced walk-up drill targets — the Sunnyside and Bora assets — and 39 identified prospects that are ripe for further exploration.
Historical drilling activity at Sunnyside and Bora intersected as much as 11.49 g/t and 20.6 g/t, respectively.
In the months after its acquisition announcement, Okapi executed 10 holes for 1,257 metres across three of Enmore’s prospects — the Sunnyside East, Sunnyside West and Bora targets.
The gold explorer completed its maiden drilling campaign in mid-July and results came in earlier this month.
During the program, Okapi intersected a thick, shallow, high-grade gold hit at Sunnyside East that totalled 174 metres at 1.83 g/t from the surface.
The hole in question also ended in mineralisation — a 3-metre hit grading at 8.86 g/t, including 1-metre at 15.15 g/t.
Because the mineralisation remains open at depth and along strike, Okapi believes there is potential to define a large, shallow open-pittable resource at Enmore.
The project sits just 20 kilometres down the road from Red River Resources Limited (ASX:RVR)’s operating Hillgrove Gold Mine. In the past, the asset has produced more than 730,000 ounces of gold.
The fine print
When the heads of agreement was first inked in December, Okapi needed to meet a number of conditions to secure its 100% stake.
First, Okapi transferred $25,000 as part of the initial consideration. Once the deal settled, it was required to pay a further $100,000 in cash and issue $200,000 worth of OKR shares.
Then, there are two milestones that require further attention — milestone one, which Okapi has just completed, stipulated the company must expend $200,000 on an exploration program and complete at least 1,000 metres of RC drilling.
Milestone two comes into play when the company defines a JORC-compliant mineral resource that totals more than 100,000 ounces, grading at least 1.5 g/t.
Once this occurs, Okapi will hand over a further $400,000, either in shares or cash at its discretion.
The deal also factors in a 2% net smelter royalty for the vendor.