As another old goldfield prepares to rise like a phoenix from the ashes, Terrain Minerals has hatched a plan to capture its value as the company elects to proceed with a farm-in agreement with a private vendor for the Smokebush gold project, an exploration play located about 65 kilometres west of Paynes Find in WA. Newly discovered historical numbers include 2 metres grading 11.3 grams per tonne gold from 70 metres downhole.
The ASX-listed junior explorer has been busy over the past weeks delving into old data sets and checking out some historical drill results and it seems that explorers past may have left a few clues as to the prospectivity of the project.
Company Geologists recently dug up some enticing historical results from patchy drilling across several prospects within the project including 2m grading 9.2g/t gold from 24m and 10m grading 1.4g/t gold from 15m.
The prospective gold ground at Smokebush comprises one exploration and four prospecting licenses that cover approximately 1,723 hectares. The licences have been fully covered with surface sampling where the historically drilled prospects, T13, T16, Monza, Hurley and Wildflower were identified.
Terrain has seen enough in the historical data to warrant further drilling and it is now planning to do a walk over of the ground before preparing a more comprehensive follow up exploration program.
The deal that Terrain has inked with the private vendor puts 5 million Terrain shares onto the vendor's balance sheet and it requires Terrain to solely fund a minimum of $250,000 in exploration expenditure over two years at Smokebush to earn 80%.
Future vendor payments rely on certain milestones being reached including the development of a gold resource greater than 2 grams per tonne and upon Terrain’s decision to mine.
The vendors will be free carried at 20% until the future completion of a feasibility study.
Several mines in the vicinity of the Smokebush project have been discovered and mined by the private vendor just next door. In addition, Tungsten Mining NL is sitting on a reasonable mineral resource at the Mulgine Trench and Mulgine Hill deposits nearby with a combined resource of 71.0 million tonnes at 0.18% tungsten trioxide and 238ppm molybdenum.
The historical Rothsay gold project is not too far to the west, which was recently picked up by ASX-300 gold producer, Silverlake Resources, via the acquisition of Egan Street Resources. The transaction value for Rothsay sat at an impressive $52 million.
Egan Street completed a definitive feasibility study at the Rothsay Gold Project demonstrating projected gold production of 289,000 ounces over an initial seven-year mine life and an undiscounted pre-tax project cash-flow to $116.1 million.
In the wider area, to the north, sits EMR Capital’s Golden Grove base metals play that has been mined over 27 years with over ten years’ worth of mine life still left in the reserves.
There appears to be plenty of geological smoke in the wider region around Smokebush and it will be interesting to see if the new year brings some fire for Terrain.
Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au
By Matt Birney
