Power Metal Resources and Red Rock Resources said their joint venture New Ballarat Gold is to acquire the exploration licence EL5535 covering the historic Berringa mine in Victoria from Balmaine Gold.
EL5535 is a 288-hectare exploration licence that has historical production of 293,250 ounces of gold from 1898-1952 at an average grade of 8.3g/t.
NBGC is in discussions with the vendor regarding the possibility of processing ore at its nearby Ballarat gold mine should NBGC discover and develop an economic deposit.
Paul Johnson, Power Metal chief executive, said: "This acquisition brings into our Victoria Goldfields JV a second former high-grade gold mine, where there exists significant underexplored exploration potential below historical workings where minimal drilling has been completed to date.
“The historic Berringa Gold Mine adds to 1,832km2 of already granted licence footprint in the Victoria Goldfields, and complements another former high-grade gold mine within the JV footprint, Ajax, which has recorded historical production of 312,789 ounces of gold at an average grade of 14.8g/t.”
Payment comprises an initial payment of A$20,000 to be followed by a further A$130,000 on the successful renewal of the licence for five years from its expiry date of 16 November 2022.
A further payment to the vendor of A$350,000 is due upon the public release of an initial Mineral Resource Estimate of not less than 100,000 ounces of gold in the Inferred category with a Net Smelter Return (NSR) Royalty of 1.5% to the vendor up to a maximum total value of A$1.5mln
NBGC inherits the responsibility for payment of a 2.5% NSR Royalty up to a A$50mln limit to Altus Strategies.