Auric set to nab mouthwatering Chalice West gold mine lookalike

Auric has secured an option to acquire more than 340km2 of ground that includes a drill-ready target with remarkable similarities to the nearby Chalice gold mine.

The Chalice West project in Western Australia’s Widgiemooltha/Norseman area covers largely “unrecognised greenstones” about 43km southwest of Widgiemooltha and 25km southwest of the company’s existing Widgiemooltha gold project.

Besides being a lookalike of the Chalice mine that produced more than 672,000oz of gold over seven years, the project also includes defined nickel drill targets and potential for both lithium and rare earths.

Chalice West consists of two exploration licences under application with Auric Mining (ASX:AWJ) expecting the principal tenement to be granted on or about 31 May 2022.

The option agreement with Mineral Business Development, which is controlled by well-known local geologist John Williams, follows recent drilling at the Guest prospect that returned hits such as 4m grading 4.5 grams per tonne (g/t) gold from 14m and 3m at 5.25g/t gold from 53m.

“The Chalice West Project tenements are an exciting addition to our footprint in the Widgiemooltha area,” Auric managing director Mark English noted.

“This is a large and underexplored area of Western Australia. We believe this project provides excellent opportunity for gold deposits and for a suite of other minerals.”

He added that the new acreage and its combination of enormous gold potential along with the possibility of nickel and lithium made for a “mouth-watering concept” for the company.

Getting set to buy

Auric has the right to acquire 100% of the shares in Mineral Business and the tenements that make up Chalice West through a staged series of payments and exploration commitments over a three-year period.

Williams recognised that aircore drilling carried out by Resolute Mining in 1993 had defined a largely unpublicised area of basalts and ultramafics coincident with distinct magnetic signatures southwest of Chalice in an area that the Geological Survey of WA had interpreted as granites.

This drilling had defined distinct gold anomalism in wide-spaced holes along a linear magnetic feature, over a 3.5km strike length.

Additionally, follow-up soil sampling by Resolute several years later identified and defined distinctive nickel anomalism in an overlapping area.

There is also potential to find more targets and resources as the existing drill and soil sampling covers just a small proportion of the tenement area.

Here comes the fine print

Auric will make an initial option payment of $275,000 cash within 5 days of 18 May 2022 and issue $400,000 in AWJ shares calculated at the 30-day VWAP for the first year of the option.

This option can be continued into a second and third year by paying the vendors the higher of $225,000 in cash or 2.25 million in AWJ shares.

At the end of the third year, the company can acquire Mineral Business and the tenements by paying $2.25m in cash or AWJ shares to the same value. The vendor will also retain a 2% net smelter royalty.

The company will also be required to meet minimum direct drilling expenditure commitments of $200,000 in the first year, combined expenditure of $500,000 by the end of the second year and combined expenditure of $1m by the end of the third year.

This article was developed in collaboration with Auric Mining, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.