Australian Mines (ASX:AUZ) has entered into a legally binding term sheet with GoldMining’s (TSX:GOLD) subsidiary Cabral Resources and Majestic D&M Holdings to earn-in the Boa Vista Gold Project in Brazil.
The group will undertake a capital raise as part of this investment of $2.5 million, with Ignite Equity and GBA Capital as joint brokers.
The details of the placement included the issuance of 312.5 million shares at $0.008 per share, with a one-for-two free attaching option which has a price of $0.022 expiring on 2 February 2027.
CEO Andrew Nesbitt says the project’s region has been recognised for its “high-grade”, structurally focused gold systems.
“But broad, continuous zones of disseminated gold mineralisation such as those observed at Boa Vista are rare,” Nesbitt says.
“The Boa Vista Gold Project offers compelling near-surface mineralisation with district-scale exploration upside, supported by existing datasets and strong historic drilling results.”
Under the deal, Australian Mines may earn up to 80% in the project through staged exploration and development expenditure and milestone-based achievements.
The company will pay an initial C$55,000 ($61,608) payment and issue $1 million worth of shares to Cabral and Majestic, subject to shareholder approval.
To earn a 51% interest, Australian Mines will spend a minimum expenditure of $4.5 million over three years, complete 6,000m of diamond core drilling, and pay C$250,000 annually.
Upon completion, the company will issue $1 million shares and will form a joint venture with Cabral.
To earn a further 19% interest, Australian Mines will spend $1 million on exploration and Feasibility Study activities on the project.
A completed Feasibility Study containing a JORC-compliant reserve of more than 250,000 ounces of gold is required to earn the 19%.
To earn an additional 10% interest, within 90 days after completing the second stage, Australian Mines will pay $5 million.
Further, Australian Mines intends to complete a close-spaced light detection and ranging program, as well as a high-resolution drone magnetic survey as part of an initial exploration program.
Upon completion, the company will initiate a drilling program. The program is expected to be in H2 2025.
Australian Mines will also update the historical resource to JORC-2012 standards, as well as advance metallurgical, environmental, and baseline studies.
Write to Aaliyah Rogan at Mining.com.au
Images: Australian Mines
