The company has entered into an option agreement to acquire 100% of the non-alluvial gold rights to the Mainland project, which sits within the Cue project boundaries.
Northern extension of shear corridor
This ground covers the northern extension of a shear corridor that hosts Musgrave’s Break of Day and Lena gold deposits and its new Lake Austin North gold discovery.
Mainland project location plan and tenure.
Musgrave managing director Rob Waugh said: “This opportunity consolidates Musgrave’s holding of the prospective Break of Day/Lena gold corridor adding another 4 kilometres of prospective strike in this exciting gold district.
“The Mainland project area has a long history of alluvial gold production accompanied by historical high-grade basement gold production.
“The project has seen very limited basement drilling and modern exploration as it has been largely held by various prospectors focused on alluvial mining for many years.”
Musgrave believes the new ground has significant untested basement gold potential.
The acquisition delivers on the company’s strategy to secure additional priority gold tenure in the district.
Mainland comprises a group of seven contiguous prospecting licences covering about 837 hectares.
Alluvial gold was first discovered at Mainland in 1893 with the first basement shaft on a gold-bearing quartz reef sunk shortly thereafter.
The area hosts many recorded historical mines with the largest being Mainland Consols and Eureka.
Alluvial gold is still being mined from the tenements including some large alluvial nuggets and coarse gold in quartz veins that is likely to be in proximity to the primary source.
Mainland area looking south from the historical Eureka mine.
A number of initial structural and surface geochemical targets have been identified for drill testing in areas of limited previous exploration.
The option agreement outlines the following consideration to the vendor:
- $125,000 on the later of the date of signing of the agreement and the vendor satisfying the condition precedent;
- A further $100,000 within 18 months; and
- An additional $300,000 paid as milestone payments in Musgrave shares or cash (at Musgrave’s discretion) before the fourth anniversary of the agreement.
Following completion, the vendor will be entitled to receive a 1% gross royalty in respect of any gold produced by the purchaser from the tenements excluding any alluvial gold.
Musgrave will manage the project and has started compiling, plotting and reviewing historical data from the new ground to enable future drill planning to test high-priority basement gold targets.
The company’s objective is to define a high-grade gold resource through discovery that when combined with existing resources and potential future Lake Austin resources, will underpin studies on a standalone development at Cue.