Westar Resources Ltd (ASX:WSR), a Perth-based mining exploration company focused on gold and base metals assets, has consolidated its base metals portfolio on entering into a binding agreement to earn a 75% stake in the Geoff Well Project.
Historical drilling identified copper-zinc mineralisation at Geoff Well, which is directly adjacent and likely contiguous to WSR’s wholly-owned Gidgee North Project.
Numerous gossans (surface indicators of mineralisation at depth) were found consistent with interpreted volcanogenic massive sulphide-style (VMS) mineralisation.
The Geoff Well Project earn-in agreement secures Westar’s strategic position over the highly prospective area, in which Westar now holds seven kilometres of strike length over the interpreted VMS mineralised stratigraphic horizon.
“Exciting and synergistic opportunity.”
“The Geoff Well Project is an exciting and synergistic opportunity for Westar to continue to build on the VMS potential of the Gidgee North district,” Westar managing director Karl Jupp said.
“SkyTEM geophysics and soil geochemistry completed to date, including at Geoff Well, clearly demonstrate along-strike potential of Westar’s identified conductors and offers significant additional upside opportunity to test additional VMS-style mineralisation targets.”
Westar plans to fast track target refinement and exploration following identification of analogous anomalies at Gidgee North which is expected to deliver strong news flow into 2022.
VMS copper-zinc potential
The company believes there is a high probability of along strike continuation of the nearby Horizon Gold strata bound copper-zinc Altair Project, due to analyses of regional datasets of the tenement including sky transient electromagnetic (SkyTEM) data.
Data highlighted ‘significant’ exploration targets in the region, with noteworthy intercepts from the Altair deposit reported as including up to 44 metres at 1.2% copper from 56 metres and 20 metres at 1.1% copper from 64 metres.
The ‘Vela’ prospect within the tenement was originally discovered by Pancontinental Mining, which conducted a single line of 12 rotary air blast (RAB) drill holes for a total of 665 metres in 1994.
While uncomprehensive, the historic drilling produced anomalous copper and zinc intercepts within the oxide zone, including 8 metres at 1.12% copper from 48 metres and 20 metres at 0.17% zinc. Historic drilling ceased at blade refusal with no new holes penetrating fresh material. No follow up exploration was ever conducted at Vela.
Stratigraphic horizon
The Vela prospect is only 900 metres from Horizon Gold’s copper-zinc Altair Prospect and is hosted within the same stratigraphic unit and geophysical conductor. Vela has been interpreted to represent a potential near-surface expression of a similar style of mineralisation.
Westar believes the Vela prospect presents a highly prospective, drill-ready target.
The stratigraphic horizon hosting Altair, Vela and the mapped gossans is interpreted to continue through E53/1832 (Geoff Well prospect) onto Westar’s 100% tenure at Gidgee North, representing the east west trending stratigraphic anomaly labelled ‘f anomaly’ in a previous announcement to the market.
Read: Westar Resources hones in on gold and base metal targets at Gidjee North Project
Westar is of the view that the acquisition of the Geoff Well project is complementary to its Gidgee North tenements and will enable the company to fast-track exploration activities via the drill ready targets, along with a further understanding of mineralisation signatures.
Next steps
Westar intends to immediately advance base metal and gold targets at Geoff Well in conjunction with the Gidgee North Project.
Planned field activities include additional soil sampling and an airborne electromagnetic (AEM) survey over high priority target areas in the southern portion of the lease that will now be extended to include Geoff Well.
Once complete, the AEM data will be used to generate plate models to assist in targeting ahead of a maiden drill program planned for the first half of 2022.
JV transaction
Westar executed a binding term sheet with Shumwari Pty Ltd, Alan Archibald Pellegrini and Glen Alexander Brown to earn up to a 75% interest in the Geoff Well base metal project. The vendors will retain 25% ownership in the project and intend to form a joint venture (JV) with Westar.
Key terms of the earn-in and JV are:
- In consideration for the right to earn-in to the project, the company agrees to issue the vendors 500,000 fully paid ordinary shares in the capital of Westar and a $60,000 cash payment. The shares will be subject to a voluntary 3-month escrow period from the date of issue;
- Westar to earn 51% ownership over the project by incurring expenditure of $200,000 within 18-months from execution of the agreement;
- Westar can earn an additional 24% (total 75%) interest by incurring an additional $200,000 expenditure within a further 18-month period. Upon earning 75% interest, the vendors and Westar will form a JV;
- The vendors will be free carried through to completion of a feasibility study after which point the vendors can elect to contribute or dilute;
- Should the vendors elect to dilute below 10% project ownership their interest will convert into a 1.25% Gross Revenue Royalty (GRR);
- Westar have first right of refusal should the vendors elect to dispose of its project ownership or its GRR; and
- Westar to operate and manage the exploration activities at the project and the JV.