Enterprise Uranium Ltd (ASX:ENU) is shifting focus from uranium to gold by entering into a milestone acquisition of gold tenements that were formerly part of Troy Resources Ltd’s (ASX:TRY) Sandstone Gold operations, which was highly profitable up until the cessation of mining in late 2007.
Historically, the Sandstone Greenstone Belt has produced 1 million ounces of gold from numerous underground and open pit mining operations.
Of this, around 612,000 ounces was produced between 1999 and 2010 from the open-pit mining of shallow oxide ore by Herald Resources Ltd and Troy Resources Ltd.
The Sandstone Gold Project covers 75% of the Archaean Sandstone Greenstone Belt, located 600 kilometres northeast of Perth in the East Murchison Mineral Field in Western Australia.
ENU will pay $500,000 in cash and 19 million ENU shares to two shareholders who fully own Sandstone. ENU will issue additional 25 million shares conditional on meeting performance standards and pay royalty of 2% gross revenue on all minerals produced.
The Sandstone Gold Project comprises 5 exploration licence applications and 2 prospecting licence applications for a total landholding of around 723 square kilometres.
ENU’s primary strategy at the Sandstone Gold Project is to execute infill drilling of near-surface oxide mineralisation near to former Troy Resources Ltd (ASX:TRY) open pits to establish new resources.
The company is also conducting reconnaissance drilling below large tracts of unexplored transported cover to find shallow open-pittable oxide mineralisation.
ENU will look for shallow oxide gold mineralisation that can be economically mined and trucked to one of several gold treatment facilities in the region.
The company will also upgrade the historic 2007 & 2011 Indicated & Inferred mineral resources to JORC 2012 standard and undertake drilling in 2016.
The acquisition should see a change in fortune for ENU.
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