Carnavale Resources Limited (ASX:CAV) has signed an exclusive and binding 24-month option agreement with Western Resources Pty Ltd to acquire 80% of the Ora Banda South Project, which covers around 25 square kilometres in the Yilgarn Craton of Western Australia.
This project is within 15 kilometres of a number of historic mines - Ora Banda, Siberia, Bullant, Mt Pleasant, Cashmans and Lady Bountiful - that have produced more than 6 million ounces.
Despite the history in the area, the tenement package remains largely unexplored with much of the tenement concealed by shallow recent transported cover.
“Potential to host significant deposit”
Carnavale executive chairman Ron Gajewski said: ”Carnavale is delighted to acquire this option to explore the Ora Banda South Project.
“Our geological team interpret the area to be under explored and highly prospective with a geological setting similar to the St Ives Invincible deposit, which hosts over 2 million ounces of gold.
“The existing positive shallow bedrock gold results in the limited historic drilling along the southern portion of the Carnage Shear Zone provides support to our view that this area has the potential to host a significant gold deposit.”
Location of Carnavale’s Ora Banda South Gold Project.
Carnavale is excited to be exploring for structural targets defined by the Carnage Shear Zone and associated structures that intersect the late basin Kurrajong sediments, that include the Black Flag Group and Kurrawang conglomerates.
The tenement package extends for over 15 kilometres along the Carnage Shear Zone and is analogous to the geology of the +2 million ounce Invincible deposits, discovered by Gold Fields Limited (JSE:GFI) in 2012.
Shallow bedrock gold results from limited aircore (Carrick Gold Ltd) and RAB drilling (Western Resources Pty Ltd) includes:
- 14 metres at 0.79 g/t from 73 metres and 2 metres at 1.56 g/t from 90 metres to EOH;
- 5 metres at 2.29 g/t from 116 metres to EOH; and
- 8 metres at 2.58 g/t from 32 metres and 4 metres at 0.72 g/t from 60 metres.
Plans going forward
Carnavale plans to commence targeted and systematic exploration of these tenements utilising modern exploration techniques such as Ultra Fine Fraction (UFF) soil sampling and shallow aircore drilling.
The program is to be funded by the company’s existing cash reserves and is expected to include:
- A review of existing and publicly available geophysical aeromagnetic surveys to define stratigraphic and structural target zones that have the potential to host gold mineralisation;
- A comprehensive and project wide review to validate and extend known gold occurrences in drilling and soil zones and define new targets;
- Ultrafine soil sampling along the Carnage Shear Zone to define drill targets;
- An aircore drilling program will be planned to target bedrock gold mineralisation and extend mineralisation in the southern tenement target areas; and
- Subject to additional results, RC and diamond drill testing for the primary source of the regolith gold anomalies.
Surface geochemical anomalies and drilling over GSWA geology map.
The terms of the agreement are:
- CAV will pay Western Resources Pty Ltd the option fee of $75,000 cash plus issue 10 million ordinary shares in CAV (pursuant to CAV’s existing placement capacity under Listing Rule 7.1);
- CAV must undertake either a surface geochemical program or drilling program on P16/3000 and P16/3001 prior to April 2021 and either a surface geochemical program or drilling program on P16/3077, P16/3081 and P16/3082 prior to June 2022;
- Upon exercise of the option, CAV must pay Western Resources Pty Ltd an additional $150,000 and issue 15 million ordinary shares (pursuant to CAV’s existing placement capacity under Listing Rule 7.1);
- Western Resources Pty Ltd would retain 20% of the project and be free carried to bankable feasibility study (BFS) and upon completion of a BFS, Western Resources Pty Ltd would be required to contribute to the ongoing costs on a pro-rata basis or be diluted, or alternatively elect to convert its 20% equity interest to a 1.5% NSR royalty; and
- During the option period, Carnavale is responsible for maintaining the tenements in good standing as defined by the West Australian mining act and sole funding of all tenement expenditure.
Acquisition and exploration strategy
Gajewski said: “Our strategy remains to acquire and explore high impact projects where potential exists to discover significant resources similar to our Kookynie Gold Project, Grey Dam and Mt Alexander nickel projects.
Carnavale is well-funded with approximately $3.5 million cash at September 30, 2020, and the initial exploration programs are planned to start during the current quarter.”