Cosmo is looking to acquire the Kanowna project with historical gold intersections next to the Kanowna Belle gold mine. Pic via Getty Images
Mining
Special Report: Cosmo Metals is adding a potentially company-making star to its constellation of projects with the execution of terms sheet for the exclusive right to acquire the Kanowna gold project in WA.
Prior to this acquisition, the company was focused on evaluating the newly discovered Minjina zinc-lead-silver prospect as well as the advanced Mt Venn copper-nickel-cobalt project within WA’s Yamarna region.
Cosmo Metals (ASX:CMO) noted in its September 2023 quarterly report that it was conserving capital with limited on-ground exploration and a focus on evaluating opportunities outside the Yamarna region to identify assets complementary to the existing portfolio with potential to add significant shareholder value.
During the quarter, it had also applied for tenement applications totalling more than 480km2 to cover the Wurnda lithium project where a review of historical geochemistry identified a >50km long lithium and associated pathfinder anomaly in soils.
However, the company might well be focusing its attention on the Kanowna project and for a multitude of good reasons.
First off, historical drilling at the project has already proven the presence of significant near-surface gold with notable intercepts such as 44m grading 2.4g/t gold from a down-hole depth of 24m including 18m at 5.3g/t gold from 18m, and 50m at 1.2g/t gold from 30m to end-of-hole, including 10m at 4.7g/t gold from 32m.
That all these were intersected in the shadow of Northern Star Resources’ (ASX:NST) adjacent Kanowna Belle mine – where +5.4Moz of gold has been produced since 1993 – is also worthy of note.
Kanowna covers >20km2 in 12 contiguous prospecting licences with heritage agreements in place just 13km from Kalgoorlie. It can be accessed via bitumen roads and is within trucking distance of multiple mills.
Despite all these strengths, the project was poorly tested by previous explorers with just 12 shallow holes drilled to date.
In addition, CMO has developed a new geological model with untested structures interpreted to connect to the Kanowna Belle system and has identified compelling aircore and RC targets for immediate follow up.
Managing director James Merrillees said the execution of the terms sheet to acquire Kanowna represents an exciting opportunity for CMO’s shareholders.
“The company has identified widespread near-surface gold mineralisation at the KGP associated with NE trending structures analogous to the Fitzroy Fault, which controls mineralisation at Northern Star’s adjacent +7Moz Kanowna Belle gold project,” he said.
“These NE trends have not been well targeted at the KGP and present exciting new exploration targets to guide future exploration at the KGP.
“Drill-ready targets have already been identified with this association at Don Álvaro, Laguna Verde and WKL, along with numerous shallow aircore intersections that have never been followed up.
“The acquisition of the Kanowna gold project will complement the company’s existing base metals and lithium portfolio at Yamarna and is a low-cost entry into the prolific Eastern Goldfields adjacent to world-class projects with exceptional infrastructure.”
CMO is currently undergoing due diligence after paying a $50,000 option fee.
Should it choose to proceed with the acquisition, it will acquire 100% of La Zarza Minerals, which owns the project, for $200,000 in cash, 8 million CMO shares priced at 5c each, and a further $200,000 cash payment within six months.
The company already plans to carry out ground activities such as RC and aircore drilling in the current quarter following successful completion of technical due diligence.
It has also received commitments from major shareholders for a $300,000 private placement to fund the acquisition.
Exploration success at the project could be a boon for shareholders of the ~$4.5 million capped CMO, which already boasts a supportive share register with the top 20 owning +70% of shares on issue. Advanced Meekatharra gold explorer Great Boulder Resources (ASX:GBR) controls ~40% of the stock.
This article was developed in collaboration with Cosmo Metals, 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.
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