Empire Metals Ltd (AIM:EEE) said it started drilling at the Gindalbie gold project in Western Australia after signing an agreement with Maher Mining Contractors Pty Ltd.
The agreement gives Empire the exclusive right to explore, develop and mine within a granted area on Maher Mining's 100% owned mining lease M27/158, which is adjacent to the eastern border of Empire’s Eclipse licence area and extends the current exploration area by more than 200%.
Empire said its exploratory drilling campaign is aimed at testing several priority targets around historical mine workings.
“The signing of the Tribute Agreement and commencement of drilling at Gindalbie represents a significant milestone in our development plans for Empire,” said managing director Shaun Bunn.
“We are continuing to build up a comprehensive portfolio of exploration projects and mining opportunities here in Australia and with the likelihood of finding additional high-grade gold mineralisation at Gindalbie, we see the potential to significantly add to the scale of our gold mineral inventory at Eclipse.
"A diamond core drilling programme is planned for Eclipse to build up a better understanding of the structural controls and improve the geological model, expected to commence early March,” he said.
Under the agreement, Empire will pay Maher Mining A$250,000 (£133,000) for an initial six-month exploration term. An additional A$250,000 is payable if Empire extends the exploration period by a further 18 months.
Empire’s minimum expenditure commitments during the two stages of exploration are A$250,000 for each period.
Empire holds a 75% interest in the Eclipse project and has an option to acquire the remainder.