PERTH (miningweekly.com) – Gold miner Doray Minerals has inked an agreement with a subsidiary of TSX-V-listed Transatlantic Mining to purchase a majority interest in the Gnaweeda gold project, about 10 km from its Andy Well mine, in Western Australia.
Doray MD Allan Kelly said that the purchase significantly increased the company’s land position in the Northern Murchison region and added another advanced high-grade exploration project to the company’s pipeline.
“A bit like Andy Well, Gnaweeda has been relatively underexplored despite some pretty exciting historical drill results. The game changer for Gnaweeda will be the ability to leverage off the existing mining and processing infrastructure at Andy Well.”
The Gwaneeda project tenements cover nearly the entire Gnaweeda greenstone belt and host existing walk-up drill targets based on previously identified high-grade gold mineralisation.
The tenements are subject to a series of existing joint ventures (JVs) between Transatlantic subsidiary Archean Star Resources Australia, Teck Resources Australia and Chalice Gold Mines.
Under those JV agreements, Archean Star has earned 100% of Teck’s interest in the project, being an 88% interest in the two main tenements and a 100% interest in the remainder. Teck retains a clawback right to 75% of the project in the event of the delineation of a Joint Ore Reserves Committee- (Jorc-) compliant resource of more than one-million ounces of contained gold, or should Teck not elect to clawback, a 10% net profit interest.
In consideration for Archean Star’s interest in the project tenements, Doray will make an A$500 000 cash payment to the Canadian company. A further A$500 000 payment will be payable to Archean Star upon the declaration of a Jorc-compliant mineral resource in excess of 150 000 oz of contained gold at Gnaweeda.
Further milestone payments, each of A$250 000, would be payable upon production increments of 50 000 oz from the project, to a maximum of A$1-million.
The acquisition remained subject to a number of conditions, including the waiving of an existing third-party first right of refusal.