Musgrave Minerals has hit paydirt yet again at its Cue gold project, with drilling at the Leviticus prospect delivering bonanza-grade hits and potentially unearthing a new high-grade lode outside of the existing 927,000oz resource.

Musgrave Minerals (ASX:MGV) has reported extremely high grades, with a top hit of 79 grams per tonne (g/t) gold, outside of the current stage one pre-feasibility study (PFS) open pit design at the Cue project in Western Australia’s mineral rich Murchison district.

Top hits within the stage one open pit design comprised 4m at 20.9g/t from 38m including 3m at 3.5g/t from 51m.

Much higher-grade intercepts of 2m at 41.5g/t from 22m, including 1m at 79.0g/t from 22m, demonstrated the very high-grade potential outside of the current Mineral Resource Estimate.

“The strong gold results continue at Cue with this drilling at the Leviticus deposit aimed at extending the mineralisation and converting the inferred resource to the higher confidence indicated category,” managing director Rob Waugh said.

Musgrave may have also uncovered a new high-grade gold lode after drilling returned an intercept of 3m at 7.3g/t from 30m, including 1m at 18.2g/t from 30m, at a higher angle to the known mineralised trend.

Importantly, this new mineralised zone is also outside of the current stage one pit design and open in all directions, which provides plenty of exploration blue sky to grow the existing resource of 42,000 tonnes at 6g/t for 8,000 contained gold ounces.

This new zone is also hosted within the same structure that hosts the high-grade Break of Day (797,000t at 10.2g/t for 262,000oz of gold) and White Heat (185,000t at 11g/t for 65,000oz of gold) deposits.

Break of Day is one of Australia’s highest grade undeveloped deposits.

“The Leviticus deposit is only 1.5km south of White Heat and is being considered as an early mining option to enable the pit to be utilised for either water storage or in-pit tailings in the subsequent years of development, thus reducing capital costs,” Waugh noted.

Musgrave recently released the highly anticipated results of the stage-one PFS that confirm the potential for the Cue project to be a high-margin, low-cost gold operation.

The headline numbers show the initial 5-year project will have a pre-tax net present value of $235m and pre-tax internal rate of return of 95%, with a quick nine-month payback for the modest $121m start-up cost, which includes a 500,000-tonne-per-annum processing plant.

NPV and IRR are measures of a project’s profitability. The higher they are, the more desirable the investment.

Cue’s total gold inventory so far stands at 12.3 million tonnes at 2.3g/t for 927,000oz.

Musgrave is planning to undertake follow-up drilling.

The explorer says all new discoveries and mineralised lodes have the potential to add tonnes to feed into the stage 2 PFS and further enhance the project economics.




This article was developed in collaboration with Musgrave Minerals, 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.