Musgrave reinforces Starlight Lode’s very high-grade gold nature

Musgrave Minerals has further de-risked its flagship Cue gold project with grade control drilling confirming the exceptional high gold grades previously discovered within the Starlight Lode, part of the Break of Day trend.

Recently completed grade control drilling by Musgrave Minerals (ASX:MGV) at its Cue gold project has validated the Starlight Lode’s high-grade endowment.

Musgrave reported multiple hits above 100 grams per tonne (g/t) gold, with grades peaking at an eyewatering 780.7g/t from just 29m below surface.

Significant intersections comprised 19m at 112g/t from 27m, including 3m at 676g/t from 31m; 28m at 68.5g/t from 21m, including 4m at 410.6g/t from 34m; 16m at 78.5g/t from 28m, including 2m at 520.8g/t from 31m; and 10m at 102.8g/t from 25m, including 1m at 780.7g/t from 29m.

Importantly, the grade control drilling program is the final drilling stage prior to permitting, approvals and further development studies.

The close-spaced drilling will provide increased confidence in the resource, enable a future resource update, and de-risk the development of the project.

All of the reported intersections are inside the stage one pre-feasibility study (PFS) open pit design at Break of Day – one of the highest-grade undeveloped open pittable gold deposits in Australia.

The Break of Day deposit currently hosts a resource 797,000t at 10.2g/t for 262,000oz of gold.

The Stage 1 PFS showed the Cue Project could be a very high margin, low-cost operation running for an initial five years and delivering a pre-tax net present value of $235m and pre-tax internal rate of return of 95%, with a quick nine-month payback.

The Stage 1 PFS includes 668,000t at 7g/t for 149,300oz in open pit mining and a subsequent underground mine inventory of 484,000t at 4.8g/t for 75,200oz at Break of Day.

Managing director Rob Waugh said following the strong financial metrics of the stage one PFS, Musgrave has focused on extending the mine life through exploration drilling, converting Inferred Resources and grade control drilling to de-risk the initial stages of open pit development.

“Grade control drilling is aligned to this strategy and represents the final stage of open pit resource drilling prior to being able to commence mining (pending permits and approvals).

“These infill grade control drilling results from the Starlight Lode at Break of Day focus on the early years of development to provide added certainty in forecasting and scheduling gold production.

“The results support and are aligned with previous data and continue to highlight the very high-grade, near-surface nature of the Break of Day gold system.”

Waugh said ongoing field activities are focused on further grade control drilling at the Twilight and Velvet Lodes, within the Break of Day Trend, and the high-grade White Heat deposit together with drill testing of new high priority gold exploration targets at Cue.

An offer too good to turn down

This high-grade opportunity has seen Musgrave land on several radars of late, which has led to two takeover offers within the space of a month.

The company is particularly enamoured with Ramelius Resources’ (ASX:RML) $201m cash and scrip and continues to urge shareholders to accept the offer.

“The Musgrave directors unanimously recommend shareholders accept the Ramelius takeover offer, in the absence of a superior proposal,” Waugh reiterated.

The offer comprises the issue of one Ramelius share for every 4.21 Musgrave shares held and 4 cents in cash for every Musgrave share held.

The offer represents significant premiums to the usual trading prices of Musgrave shares and a premium to the earlier Westgold Resources (ASX:WGX) offer.

It also provides Musgrave shareholders the opportunity to become a shareholder in a company that has a history of cash generation and dividend payments, while reducing the possible risks related to the development of the Cue gold project.

Ramelius, which is a top 10 Australian gold producer, has accumulated a 21.75% stake in Musgrave so far.

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.