Special Report: Successful Western Australian gold explorer Musgrave Minerals (ASX: MGV) could be on the brink of its best discovery yet with a newly acquired tenement that has produced plenty of big nuggets for prospectors over the years.
The Mainland Project previously stood out as an 837-hectare patch of ground not held by Musgrave within the tenements that make up the southern part of its Cue Gold Project in WA’s Murchison district.
In March, however, Managing Director Rob Waugh was able to strike a deal with the prospectors that own Mainland, giving the company an option to acquire the non-alluvial or “basement” gold rights by making staged cash payments over four years.
There is also a 1% gross royalty payable on any gold produced by Musgrave.
What has Waugh and others within the company excited is the fact that while Mainland has been lucrative for the prospectors for a long time – the first alluvial gold was discovered there in 1893 – very little basement drilling has been done to locate the source of many of these nuggets.
“We’ve done this deal that allows the prospectors to continue prospecting – they’ve made a living out of that for 30 years – while we look at the basement,” Waugh said.
“A lot of alluvial gold has been found including some very large nuggets. What hasn’t been done is a lot of basement exploration.”
“You have all this alluvial gold. It’s come from nearby sources, many of which are yet to be found.”
“If we find that source, we know the grades are going to be high.”
Musgrave flew an aeromagnetic survey over Mainland at the weekend to help with identifying additional drill targets and is expected to begin an initial drilling campaign in early July.
Building towards a stand-alone mine
A discovery at Mainland would complement the existing resources the company has defined at Break of Day (868,000 tonnes at 7.15 g/t gold for 199,000 ounces) and Lena (2,682,000 tonnes at 1.77 g/t gold for 153,000 ounces) and the emerging discovery at Lake Austin North, all of which lie to the south.
It would also boost the case for a stand-alone mine development at Cue and further the analogy Musgrave sees between the project and the historic Great Fingall gold mine 30km to the north.
Great Fingall was once one of WA’s biggest and most profitable mines, producing high grade gold from multiple pits and underground lodes along an extensive mineralised corridor.
Waugh can see the multiple pits scenario unfolding along the Break of Day/Lena shear zone, 13km of which lies under the large salt lake system that runs through the tenements and has seen very little exploration to date.
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This story was developed in collaboration with Musgrave Minerals, a Stockhead advertiser at the time of publishing.
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