Silver City acquires transformational gold project next to Musgrave
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Silver City Minerals has struck a transformational deal to acquire an 80% interest in the Austin Gold Project in WA’s highly prospective Murchison region.
In the Austin project, Silver City (ASX:SCI) adds to its books a 175km2 project in the prolific gold mining district of the Mt Magnet and Tuckabianna greenstone belts of WA.
The project encompasses a large portfolio of granted mining leases and exploration licences adjacent to Musgrave Minerals’ (ASX:MGV) Cue gold project and its high grade Break of Day deposit and Starlight discovery.
Minimal modern exploration has been carried out at Austin but limited shallow drilling has intersected high grade gold which was never followed up.
Hits recorded include 6m at 15.8 grams per tonne from 36m, including 2m at 43g/t in BRGC-03 at the Brunswick Hill prospect, and 2m at 4.9g/t gold from 32m to end of hole in AUSRC20 at the Brians prospect – with core showing visible gold.
Further due diligence work carried out by Silver City at Austin indicates a dominant northwest control in at least two localities, including an in-situ quartz vein at Brians with abundant visible gold.
The company said the control was similar in orientation to high-grade controlling structures throughout the Mt Magnet and Cue district deposits, including Musgrave’s Starlight discovery adjacent to Austin. Musrgave have recently ‘cracked the code’ on how to explore these strcutures which Silver City hopes to benefit from through its exploration efforts.
A number of other targets have also been highlighted based on widespread gold observed at surface by historical and present-day prospectors employed by Gardner Tenements Pty Ltd – the vendor of the project.
The project has been privately held by a number of companies for more than 20 years, with widespread alluvial and hard rock gold recovered from near-surface exposures over that time.
Silver City said the project presented huge exploration opportunities.
“The Austin gold project represents an excellent opportunity for the company to conduct a new exploration strategy based on the newly identified controlling structures based on the newly identified controlling structures across a large and highly prospective tenement package, similar to that of the Break of Day deposit,” the company said in an announcement to the ASX today.
In addition to Brians and Brunswick Hill, Austin is also home to Mt Sandy, where alluvial mining has been carried out and gold recovered over an area of around 1.2km by 700m.
The Teds prospect area, where gold specimens have also been recovered, occurs on a different geological trend along strike from the Tuckabianna gold deposit where Westgold’s 1.2 million tonne per annum processing plant is currently located.
The Gardners team recently discovered three rich pods of surface gold at Teds, with bulk sampling presenting some exciting results.
A series of historic gold pit workings are present at the Buccaneer gold mines area, which is estimated to have produced around 600 ounces of hold historically, while the Shadow target has also been identified as an area of interest due to a number of gold nuggets found in the past.
A program of geophysics and geochemistry work is currently underway at Austin.
SCI has outlined a plan of attack at Austin, with a series of steps designed to assist in drill targeting work.
These include reprocessing of airborne magnetic and historic soil geochemistry data, the submission of 30 rock samples taken during the due diligence field trip and 12 historic RC sample bags for processing, and digitisation of all historic drill data into a comprehensive database.
Additional work programs are also being planned for the coming months, with the details as follows:
The acquisition of an 80% stake in Austin comes in exchange for the issue of 300 million fully paid ordinary shares at an issue price of 1.5c each.
Silver City and Gardners will form an incorporated joint venture to explore and develop the tenements, with the latter free carried in the JV until the company makes a decision to mine or terminates the agreement.
The deal is subject to a number of conditions precedent, including a placement to raise no less than $1 million at an issue price of no less than 1.5c per share.
Cash raised will be used to explore and develop the project, for the company’s existing exploration assets, and for working capital purposes.
Canaccord Genuity has been appointed lead manager of the placement.
This article was developed in collaboration with Silver City 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.