When a major agrees to drop a further $5m on exploration in a joint venture with a junior explorer following the discovery of a new gold zone, it’s not insignificant.

Musgrave Minerals (ASX:MGV) revealed today that it and partner Evolution Mining (ASX:EVN) had unearthed a new high-grade basement gold zone at the West Island target, part of the Cue JV over Lake Austin in Western Australia.

The partners were testing part of a 7km long aircore anomaly with diamond drilling that delivered significant gold mineralisation and provided strong evidence of a new find.

The first four diamond drill holes returned top hits of 11.5m at 3.2 grams per tonne (g/t) gold from 245m, including 3m at 10.6g/t from 247.5m; 11m at 3.6g/t from 272m, including 5m at 5.5g/t from 276m; 5m at 2.7g/t from 169m; and 0.4m at 23.5g/t from 144.7m.

All four of the West Island drill holes intersected multiple zones of gold mineralisation all hosted within a structure that extends over multiple kilometres of strike.

Location plan showing EVN JV tenure, aircore drill hole locations (maximum gold in hole is presented as a gradational colour scheme at the hole collar) and diamond drill hole collars from the recently completed diamond drilling program. Pic: Supplied.

This new discovery prompted Evolution to agree to spend a further $5m on exploration on the JV ground over the next 12 months.

This includes 7,000m of additional diamond drilling at West Island and other basement targets together with a further 25,000m of aircore drilling to define new targets.

The news pushed shares up over 7% on Wednesday morning to an intra-day peak of 37.5c.

Musgrave Minerals (ASX:MGV) share price chart


Musgrave said the mineralisation at the West Island target was similar to the mineralisation in the high-grade Great Fingall and Golden Crown deposits 25km to the north, which host a combined 4.4 million tonnes at 14.1g/t for 2 million oz of contained gold.

“This is a great early result from diamond drilling and a strong endorsement of the joint venture program on Lake Austin,” Musgrave managing director Rob Waugh said.

“We are looking forward to the re-commencement of diamond drilling in July to further test the extent and grade of the gold system at West Island. Evolution’s ongoing commitment is a strong affirmation of the upside potential of the project.”

The new gold zone has so far been defined over a 400m strike and remains open to the north, south and at depth.

Since October 2019, the JV partners have completed two phases of regional aircore drilling on Lake Austin, comprising 436 holes for 48,895m.

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.