Gascoyne Resources has consolidated its ownership of the 1.12Moz Dalgaranga Gold Project in the Murchison region of Western Australia through acquisition of the minority joint venture partner’s 20% interest in the Mining Lease and miscellaneous licences.
The Dalgaranga project covers the majority of the Dalgaranga gold belt. After discovery in the early 1990’s, the project was developed and from 1996 to 2000 produced 229,000 oz’s of gold with reported cash costs of less than $350/oz.
The project contains a JORC Measured, Indicated and Inferred Resources of 25.7 Mt @ 1.4g/t Au for 1,116,000 ounces of contained gold and has a Proved and Probable Ore Reserve of 552,000 ounces of gold.
The transaction will see Gascoyne pay $4.5million in cash and a further $1.5 million after 30,000 ounces have been produced from the project, as well as 11 million Gascoyne shares, escrowed for 12 months.
“The holder of the minority joint venture interest elected to receive large proportion of the consideration in Gascoyne shares, and has agreed to a 12 month escrow on the consideration shares, reflecting his belief in the substantial upside of the Dalgaranga project, and the more general benefits of exposure through long term share ownership in Gascoyne,” the company told the ASX.
“Gascoyne welcomes this vote of confidence from our partner in not only the project but also in the way in which we undertake exploration through careful targeted and aggressive exploration, and the confidence he has in Gascoyne to successfully deliver the Dalgaranga Gold Project into production and ultimately strong cashwflow.”
The company’s Managing Director Mike Dunbar said the move to 100% ownership of the Dalgaranga project represents a “very significant milestone” for Gascoyne which would not only greatly simplify the development of the project, but provide greater exposure to the exploration potential on the Mining Lease as well.
“Gascoyne now has two 100% owned +1.0 million ounce gold project (Dalgaranga and Glenburgh) in Western Australia on granted Mining Leases, which are highly prospective and remain underexplored,” he said
“This puts the company in a fantastic position in having not only the near term development ~100,000ozpa Dalgaranga Project, but also a growth project in Glenburgh which could, over time, see development of a second project increasing production towards 220,000ozpa.”
Gascoyne said it has made significant progress towards development of the project, including finalisation of permitting and acquisition of long lead time items, and ongoing resource extension drilling funded by its existing cash position.