Power Metal Resources plc and Red Rock Resources plc are to acquire the historic Berringa gold mine within exploration licence EL5535 in the Victoria gold fields of Australia.
BUSINESS STRUCTURE
The partners’ joint venture (JV) company Red Rock Australasia Pty Ltd (RRAL) entered an agreement for the acquisition from Balmaine Gold Pty Ltd which is a wholly owned subsidiary of Golden Point Group Pty Ltd, itself the subsidiary of Shen Yao Holdings Ltd.
RRAL is the operator and subsidiary of the JV’s local company New Ballarat Gold Corporation plc (NBGC).
Power Metal holds 49.9% and Red Rock 50.1% in RRAL.
EL5535
Power Metal said that EL5535 is a 288-hectare exploration licence located approximately 25km southwest of Ballarat.
The licence covers the Berringa gold mine which has historical production of 293,250 ounces of gold from 1898-1952, at an average grade of 8.3g/t.
A 30-tonne bulk sample extracted in the mid-1970s from a 116m deep central shaft returned an impressive grade of 9.8g/t.
TERMS
RRAL will issue to the vendor staged cash payments totalling AUD$500,000.
The JV also inherits responsibility for a pre-existing 2.5% NSR royalty, with total payments capped at AUD$50m, payable to Altus Strategies plc.
Altus has to date received AUD$14.5m, leaving AUD$35.5m of the capped amount.
TARGETS
Power Metal added that drill targets identified from an analysis of previous exploration would enable RRAL to move rapidly to drilling.
Technical reports from 2004 and 2014 calculated possible exploration target ranges down to 1000m of 0.91 to 3.89 million and 0.70 to 2.91m ounces of gold respectively at Berringa.
Power Metal said that NBGC was discussing with Balmaine the possibility of processing ore at their Ballarat gold mine some 25km away, in the event of an economic deposit.
HISTORIC
Power Metal chief executive Paul Johnson added that the acquisition was the second former high-grade gold mine for the JV.
“There exists significant underexplored exploration potential below historical workings where minimal drilling has been completed to date.
“The historic Berringa gold mine adds to 1,832km2 of already granted licence footprint in the Victoria gold fields, and complements another former high-grade gold mine within the JV footprint, Ajax, which has recorded historical production of 312,789 ounces of gold at an average grade of 14.8g/t.”
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