Elysium Resources blasts into orbit after joining the Pilbara gold hunt

Elysium Resources shot up as much as 150 per cent on Tuesday after announcing it would join the long list of hopefuls chasing “Witwatersrand-style” conglomerate-hosted gold in the Pilbara region of Western Australia.

The Witwatersrand Basin is South African geological formation that houses the world’s biggest known gold reserves, producing 2 billion ounces or about half of gold ever mined.

Perth-based Elysium (ASX:EYM) told investors it was buying unlisted Hardey Resources and its Pilbara tenement package.

Hardey owns four projects — Bellary, Hamersley, Cheela and Elsie North — covering 512 sq km of Fortescue Group rocks as well as the Grace project in the Paterson Province in Western Australia.

The Fortescue Group is made up of mafic volcanic rocks found in the Fortescue Basin in the Pilbara Craton which are known to host gold and other minerals.

The news sent Elysium shares soaring to an intraday high of 2c, up 150 per cent, before cooling to 1.6c — up 100 per cent.

Exploration crews mobilising

The company is wasting no time getting on the ground. A maiden exploration program will initially focus on the Bellary project to target the conglomerate-hosted gold potential of the project.

Exploration field crew are mobilising to site to begin systematic quad bike- assisted soil and stream sediment sampling and prospecting.

Exploration will focus initially on 46 sites of interest located within the target stratigraphy of the Fortescue Group Rocks and, in some cases, supported by historic geochemistry gold anomalism.

Phase one of the program is expected to take around a month to complete.

The deal is for 277.8 million Elysium shares at 0.9c issue price, 111.1 million performance shares to be converted to Elysium shares if an inferred resource of 50,000 ounces is defined within three years, plus 139 million 2c options expiring in April 2020.

Elysium will also beef up its management team with Tom Langley to be appointed as exploration manager for the company. He will also have an option to be appointed as a director at any time within a year of the acquisition.

Elysium is also undertaking a placement to raise $1.5 million to fund the acquisition.

Background

Hardey applied for an Exploration Licence back in November last year covering 163 square kilometres of ground prospective for Witwatersrand-style conglomerate-hosted gold and high grade orogenic gold in the Paraburdoo region of Western Australia.

Following the recent Pilbara gold rush, which saw Novo Resources and other ASX listed gold hopefuls pegged ground surrounding Hardey, the company identified and pegged further licences resulting in a tenement package made up of 512 square kilometres of Fortescue Group Rocks and the underlying Pilbara granite-greenstone terrain.

Elysium has a market cap of around $8 million.