Rox Resources (ASX: RXL) has a binding letter of intent with Avoca Resources (ASX: AVO) to acquire the Mt Fisher gold-nickel project in Western Australia, thereby adding a valuation changing element to its Myrtle zinc-lead project portfolio.
The acquisition will enable Rox to secure 100% of all the mineral rights to the entire southern portion of the Mt. Fisher greenstone belt where there are three major gold prospects and which has seen largely either RAB or aircore drilling only.
This belt lies immediately to the west of the prolific Yandal greenstone belt that hosts world class mines including the Jundee, Bronzewing and Darlot gold deposits.
Numerous high grade gold drill intercepts were found up to 187 g/t gold in the Project area including 1 metre at 187 g/t gold from 71 metres, 3 metres at 67 g/t gold from 45 metres and 1 metre at 64 g/t gold from 42 metres from Moray Reef.
Rox managing director Ian Mulholland has craftily taken advantage of Avoca's focus on its Higginsville-Trident operation and its recent merger activities to strike a potential valuation changing deal.
Avoca had defined a major new gold bearing corridor that strikes for over 7km within the project area.
Consideration for the deal is 20 million fully paid ordinary Rox Shares to be issued to Avoca.
Additional Rox shares will be issued to Avoca if the following milestones are met:
- 20 million fully paid ordinary shares if a JORC Resource greater than 250,000 ounces of gold at a 0.8g/t cut-off is identified; and
- 10 million fully paid ordinary shares if a JORC Resource greater than one million ounces of gold at a 0.8g/t cut-off is identified.
Shareholder approval will be required to issue the shares to Avoca and will be sought immediately the due diligence is successfully completed.
The Mt Fisher project has extensive gold-in-regolith anomalies over several kilometres in length with immediate and compelling drill targets available.
There is also a five kilometre section of an ultramafic belt highly prospective for nickel sulphide.
This under explored 615 km2 project is located only 40km to the east of the prolific Yandal greenstone belt and 100km east of the main Wiluna belt, which both contain world class gold mines.
The Mt Fisher project hasn’t seen serious exploration for over 10 years and with the gold price currently at $1,374.10 an ounce, the acquisition could prove to be very astute.
In the period 1987-1989, 23,700 ounces of gold were produced at a grade of 5.3 g/t gold from a small open pit at Mt Fisher.
Ian Mulholland, Rox managing director, said “Avoca has defined a major new gold bearing corridor that strikes for over 7km within the project area, but due to its success and focus on the Higginsville- Trident operation and its recent merger activities, the Mt Fisher project hasn’t been a priority for Avoca.”
Rox recently farmed out of the Myrtle zinc-lead project to Teck Resources (ASX: TCK) in a $15 million deal. It also has a the low cost staking of the Marqua phosphate project.
Rox is now very well positioned to go forward with the three compelling gold targets identified along the greenstone belt at Moray Reef, Dam-Dirks and Mt Fisher East.
Moray Reef, whilst modest in size, features numerous high grade drill intercepts including 1 metre at 187 g/t gold from 71 metres and 3 metres at 67 g/t gold from 45 metres.
A JORC compliant resource should be possible to be estimated after some limited additional work.
The mineralisation remains open along strike and at depth below 100m. Given its high grade nature this prospect provides an immediate drill target.
At Dam-Dirks previous work has identified the presence of considerable supergene gold enrichment along a number of separate parallel structures.
Drilling by previous explorers has returned a number ofencouraging results including 9 metres at 7.1 g/t gold from 76 metres and 3 metres at 17.4 g/t gold from 30 metres.
At Mt Fisher East a 600m x 1.8km long gold anomaly peaking at 54 ppb gold as been identified. Drill intercepts of 13m at 16 g/t gold and 6m at 2.8 g/t gold have been obtained.
A number of broad anomalous zones of gold have been identified which have not been effectively tested by drilling.