Photo by: Bloomberg
PERTH (miningweekly.com) – Gold miner Doray Minerals has expanded its gold footprint, entering into a farm-in agreement with fellow-listed Alloy Resources over its Horse Well project, in Western Australia.
Under the terms of a heads of agreement, Doray would pay Alloy some A$100 000 in cash, and would spend A$2-million on exploration in the first two years of the farm-in, to earn a 60% interest in the Horse Well project.
Doray could then elect to spend a further A$2-million, within three years, to take its ownership of the project to 80%.
Alloy would contribute to the project from the prefeasibility study stage onward, or could dilute its interest in the project to a 1% net smelter royalty.
Doray MD Allan Kelly told shareholders on Friday that Horse Well represented an attractive exploration opportunity for the company, given its many similarities with the Yandal Belt to the south, and its relative lack of recent systematic exploration.
“We believe, given the geology, structural setting and results achieved to date, that there is the potential for discovery of a significant gold-bearing deposit within the project area,” Kelly said.
Alloy controls some 950 km2 of exploration tenements in the northern part of the Millrose greenstone belt, owns the majority of the leases and covers some 50 km strike of the belt. A mineral resource of some 100 000 oz has been estimated at the project, and over the past two years, exploration has extended the prospectivity for new gold discoveries long the greenstone belt.
Alloy has completed all the permitting and heritage clearance required for a major programme of extension drilling and new target testing, and Doray would complete the drilling programme in the second half of the year, as part of its first earn-in hurdle.