Legacy Iron Ore (ASX: LCY) has signed an indicative term sheet with the Ling prospecting syndicate to acquire an interest in a contiguous package of gold tenements – the Yundamindera Project – in Western Australia.
The tenements are located about 30 kilometres northwest of the company’s Mt Celia gold project in a highly prospective region with the world class Sunrise Dam, Wallaby and Sunrise Dam gold mines located about 20 kilometres to 30 kilometres to the east and northeast.
These have total resources of about 20 million ounces of gold.
Recent gold exploration and resource drilling in the area includes Exterra Resources (ASX: EXC) with its Linden/Second Fortune and Saracen Mineral Holdings (ASX: SAR) with Red October and Tin Dog.
Of major interest to Legacy Iron is the White Quartz Hill gold prospect that takes the form of a large broad hill topped by a 300 metre white quartz reef.
While the reef has little gold mineralisation, there are several other sets of narrow quartz veining, some of which have been shown to contain strong visible gold.
There has been no historic workings on this prominent hill and no drilling to date.
The high grade quartz veins, structural complexity and widespread alteration all indicate an excellent potential for defining a significant gold resource.
Under the terms of the Term Sheet, Legacy Iron or nominee can earn a staged interest in the project area by committing exploration funds of $150,000 and a further $250,000 to earn a 60% and 80% interest respectively.
Legacy Iron must spend at least $100,000 prior to withdrawal, of which $50,000 is to be expended in direct drilling costs.
At completion of the earn-in period, the parties will contribute expenditure pro-rata with normal dilution clauses applying.
The vendors will remain at a minimum of 10% interest post any dilution.
In the event a decision is made to commence a Bankable Feasibility Study, the vendors will contribute in proportion to their interest at the time, or withdraw from the Joint Venture and convert its Joint Venture interest to a 2% Net Smelter Royalty.
The agreement also provides for the initial payment of some $30,000 cash plus reimbursement for tenement costs, plus $50,000 in fully paid shares in Legacy Iron or its spin off entity.
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