Battery Minerals Limited (ASX: BAT) announced that it has signed a binding agreement to purchase 67% of Gippsland Prospecting by paying Gippsland shareholders $335,000 and issuing them more than 294 million shares in return.
With this agreement, Battery Minerals will secure a major stake in 809sqkm Block 4 tenement of Gippsland Prospecting, adjacent to Stavely’s Thursday’s Gossan discovery in Victoria.
The company said that there was extensive evidence to support the view that Block 4 was highly prospective for both gold and base metals.
As per the terms of the agreement, two Gippsland Directors, Kent Balas, and Darryl Clark, will become Directors of BAT, while Block 4 will be renamed as E67801.
The Gippsland Project hosts +40km of the highly prospective Stavely Volcanics and the historic high-grade Moyston gold mine, and the Miga Arc all considered prospective for base metals and gold in the region.
Gippsland Prospecting Pty Ltd, by winning the Victorian Government tender, currently has the sole right to apply for a highly-prospective exploration licence.
Moyston goldfield historic exploration
BHP had explored the Moyston goldfield in 1997, drilling 80 RC holes for 4,247 metres (53 metres average depth). The prospect has not been drilled since this time and mineralization remains open at depth and along strike.
Better results included MMR31, 2 metres at 26g/t Au from 8 metres; MMR39, 1 metre at 13g/t Au from 19 metres; MMR44, 4 metres at 13g/t Au from 21 metres; MMR45, 1 metre at 16g/t Au from 34 metres and 10 metres at 9g/t Au from 51 metres; MMR50 4 metres at 3g/t Au from 51 metres; MMR51, 3 metres at 2.6 g/t Au from 16 metres; MMR67, 18 metres at 1.4 g/t Au from 52 metres; MMR68, 2 metres at 5 g/t Au from 4 metres; MMR69, 2 metres at 12 g/t Au from 62 metres; MMR70, 13 metres at 2.9 g/t Au from 79 metres; MMR74, 2 metres at 5 g/t Au from 25 metres; and MMR79, 5 metres at 6.6 g/t Au from 138 metres.
Gippsland Project’s Block 4 tenement covers 809sqkm and hosts the historic Moyston gold mine, which produced 75,000oz at 22g/t Au. The tenement is immediately adjacent to Stavely Minerals’ Thursday’s Gossan copper-gold project in Victoria.
Block 4 is considered highly prospective for shear zone-hosted Orogenic gold deposits such as Stawell as well as volcanic-hosted base metals mineralisation and large-scale Cadia Ridgeway-type porphyry copper mineralisation, within the well-defined Stavely volcanic belt.
The currently operating Stawell gold mine was the largest gold mine in Victoria from it’s reopening by Western mining in the early 1980’s, and the ‘Stawell style’ of mineralization has been proven to be amenable to modern mining methods.
Acquisition of Gippsland Prospecting
BAT reported that it has now signed a binding agreement to acquire 67% of Gippsland Prospecting Pty Ltd.
The acquisition is subject to the approval of Battery Minerals shareholders and the grant of the exploration licence. Shareholder approval is expected to be sought in April, 2020.
Terms of agreement
Battery Minerals reported the below key terms of agreement.
67% stake in Gippsland Prospecting
Battery Minerals announced that it will acquire 67% of the shares in Gippsland Prospecting Pty Ltd, the owner of 100% of Block 4.
Subject to shareholder approval, Battery Minerals will issue 294,373,780 ordinary shares and pay up to $335,000 to the 2 shareholders of Gippsland Prospecting Pty Ltd as consideration.
Battery Minerals has made a pro-rata offer to the remaining shareholder that owns 33% of Gippsland Prospecting, for a consideration of 144,990,070 ordinary shares and $165,000
As per the terms, Battery Minerals has agreed to spend a minimum of $1.5 million on exploration and evaluation on Block 4 in the first 12 months after completion of the transaction.
The company said that subject to shareholder approval, Battery Minerals will issue the new members of the management and consulting team 70 million Zepo incentive 5-year options where vesting is subject to clear performance targets, being the definition of mineral resources, ore reserves and a decision to mine.
In addition, Battery Minerals will repay Gippsland Prospecting shareholder loans of ~$250,000 for past expenditure.
Renaming block 4
The terms also state that Block 4 will be renamed E67801 on grant of the exploration licence.
BAT said that on completion of the transaction, Mr. Kent Balas and Dr. Darryl Clark will join the Battery Minerals Board, and Mr Balas will be appointed as Managing Director of Battery Minerals.
Capital for acquisition
The company reported that will spend a minimum of $1.5 million on exploration and evaluation on Block 4 in the first 12 months after completion of the transaction.
BAT said that this will be funded out of the Company’s cash at bank position which stood at $4.1 million on 31 December 2019.
In addition, The Victorian State Government will support ongoing exploration with a $500,000 grant to Gippsland Prospecting to contribute to exploration expenditure. The Victorian State Government had recently released this ground as part of a ground release tender process.
Other tenements acquired
With this acquisition, the Company will have acquired more than 40 strike kilometres of the highly prospective Miga Arc and stavely volcanics, which host the Thursday’s Gossan copper deposit and other base metals and gold discoveries by Stavely Minerals Limited’ on adjacent tenements.
The acquisition provides the Company with access to 214 square kilometres of the Miga Arc, and is a key value driver for this purchase.
BAT reported that the fieldwork completed as part of the acquisition process has confirmed large areas of Stavely Volcanics will be suited to cost effective geophysics, geochemical sampling and shallow drilling which the Company is looking to implement as soon as possible.
Battery Minerals Chairman David Flanagan said: “Block 4 has the same rocks that host the Thursday’s Gossan copper-gold discovery and it is in the same corridor that hosts Navarre’s gold discoveries. Block 4 also hosts the Moyston gold mine and it is right next door to the Stawell gold mine.
The tenement has not been thoroughly explored for more than a decade and even then it was limited to shallow drilling near the Stawell mine.
Given the recent substantial exploration success close by and the outstanding prospectivity of the geology, we are looking forward to applying modern exploration techniques and drilling to a new project that has effectively been mothballed for over 10 years.”