Musgrave Minerals confident link-lode drilling between Lena and Break of Day deposits could add to Cue gold resource

Musgrave Minerals Ltd (ASX:MGV) managing director Rob Waugh told the audience at the RIU Explorers Conference in Fremantle that the company is searching for high-grade systems with the opportunity for near-term production at its Cue Project in Western Australia

Waugh said: “Our value is significantly underpinned by a JORC resource and we have significant exploration upside.

“We’re in a really good location, strategically positioned in the district and we’re looking forward to increasing our resource base to make decisions about development, whether that be with a partner or stand-alone.”

The company’s new earn-in joint venture with Evolution Mining Ltd (ASX:EVN) covers 28 kilometres of shear zone at Lake Austin and around 50% of land holdings in the Murchison region.

Waugh said: “It’s $18 million in funding with a minimum commitment of $4 million in the first couple of years.

“We’ve had some strong hits including 52 metres at 3.8 g/t and some other strong intersections.

The JV area excludes Musgrave’s existing resource base at the Break of Day and Lena deposits.

Waugh said: “We’ve just had a Lena resource upgrade to about 613,000 ounces of gold and we also hit a high-grade intersection of 6 metres at 31 g/t.

“We were able to increase our grade by 28%, increase our ounces by over 100% and we’ve also included a 72% increase in our indicated resource which is near surface.”

In December, the company hit a strong 45-metre intersection at just under 12 g/t on what it has coined ‘a link-lode’ between Lena and Break of Day.

Waugh said: “This opens up a whole new search space and we’re looking forward to continuing to drill there.

“We see no reason why there could not be other link-lodes in the drilling area.”

The current JORC indicated and inferred resource at Break of Day is 868,000 tonnes at 7.2 g/t for 199,000 ounces,

Waugh said: “Assays are pending but if that drilling is successful, we’ll look at doing a resource update at Break of Day in the second quarter 2020.”

The project is also surrounded by existing infrastructure with six third-party mills nearby which have the capacity for high-grade feed and major shareholder Westgold Resources Ltd (ASX:WGX) just 40 kilometres up the road.

Waugh said: “Infrastructure is excellent within the belt and there’s a lot of exploration upside.

“We’re in a really high gold environment – in Aussie dollar terms $2,400 – and there’s a lot of opportunity to grow the resource we have at Cue.

“We’re looking forward to the next 12 months and expect to be extremely active.”