Latitude Consolidated has snapped up the high-grade Andy Well and Gnaweeda gold projects in Western Australia – a combined existing mineral resource of 776,000 ounces – in a deal worth $8 million.
Purchased from Silver Lake Resources (ASX:SLR), the projects span a 343km2 area in the prolific Murchison gold fields, in close proximity to a number of multi-million-ounce mining centres including Westgold Resources’ (ASX:WGX) prolific Meekatharra and Fortnum operations and TSX-listed Superior Gold’s Plutonic project.
In Andy Well, Latitude Consolidated (ASX:LCD) picks up a project which produced more than 350,000 ounces of gold for Doray Minerals at more than 8 grams per tonne between 2013 and 2017.
The project was once so prolific that in 2015 it won Australian Mining’s Australian Mine of the Year award. Doray merged with Silver Lake in 2019.
The project was put on care and maintenance in September 2017 due to depressed gold prices and competing capital requirements at the Deflector mine. All-in sustaining costs for FY17 were reported by Doray at $1517 for production of 53,000 ounces.
The Australian dollar gold price currently sits around $2450.
Its recent production history means it has extensive infrastructure in place including a partial processing plant, tailings dam, underground mine development and surface haul roads.
Andy Well has an existing mineral resource of 1.8 million tonnes at 8.6 grams per tonne gold for 505,000 ounces and substantial brownfields exploration upside.
Latitude said it planned to drill a number of known mineralised trends at Andy Well once the transaction was completed.
Gnaweeda spans the Turnberry, Chiddle Well, Bunarra and St Annes deposits, and adds a further mineral resource of 4.2 million tonnes at 2g/t for 271,000 ounces. A number of high-grade drill intercepts at Turnberry remain open at depth, and promising intercepts on the other three deposits are also expected to be followed up.
Teck Australia currently holds an 8.8% net profit interest over Gnaweeda with an option to earn back a 66% interest by defining a 1-million-ounce resource at its own cost within four years based on a minimum spend of $7.5 million. The option lapses if a resource isn’t defined.
Latitude said a scoping study assessing a combined Andy Well and Gnaweeda would kick off as soon as the transaction has been completed.
Speaking on the acquisition, Latitude chairman Timothy Moore said the company was thrilled to have picked up such a prospective landholding in a prolific gold region.
“The board’s intention has been to identify a strategic acquisition opportunity that provides our shareholders with exposure to a compelling geological story, with a clear pathway to generate growth through brownfields exploration, and we believe Andy Well and Gnaweeda tick both of these boxes comfortably,” he said.
“The Murchison Gold Fields in WA is a prolific mining province with several multi‐million-ounce gold mines and operating mills located within trucking distance of the Andy Well and Gnaweeda Projects, so the opportunity to rapidly advance these assets is very attractive.”
The deal is subject to shareholder approval.
New members on board
Latitude also announced plans to appoint Tim Davidson as its CEO and Paul Adams as a non-executive director once the transaction is complete.
Both new board members offer extensive experience in gold space. Mr Davidson is a mining engineer operational, technical and management experience domestically and abroad.
He has held senior roles within Silver Lake and Pantoro, where he assisted in the delivery of the Norseman gold project feasibility study.
Mr Adams adds more than 30 years of experience across capital markets, mining and exploration. He was previously managing director of Spectrum Metals before it was taken over by Ramelius Resources and Director – Head of Research and Natural Resources and broker firm DJ Carmichael.
His experience includes senior roles with companies such as Placer Dome, Australian Gold Mines and Dominion mining.
The management team is expected to work on resource modelling and exploration targeting with a view to starting aggressive drilling once the transation is completed.
“Both Tim and Paul are highly experienced mining professionals who will bring to the table the skills and networks required to transition Latitude to the next level,” Moore said.
Raising funds
Latitude is also seeking to raise $10 million by way of a two-tranche capital raising involving a share placement worth $838,772 and a subsequent capital raising of $9.16 million subject to shareholder approval.
The capital raise would bolster Latitude’s current cash holdings ahead of the acquisition – the company currently has $2.8 million in the bank.