CGN Resources (ASX:CGR) has agreed to a binding agreement with Patronus Resources (ASX:PTN) to acquire the Desdemona Project in Leonora, Western Australia, which adjoins CGN’s Leonora Gold Project.
The acquisition comprises three mining licences, eight exploration licences, and nine prospecting licences for a total area of 142km2.
CGN will issue 5 million in shares for the acquisition, which represents 4.3% of the company’s fully diluted entity. This share issuance is valued at around $500,000 from current share pricing and will be held in escrow for one year.
The company will also pay $250,000 upon declaration of a resource estimate exceeding 100,000 ounces of gold, and a further $500,000 in cash upon a decision to mine.
Following the completion of this acquisition, CGN will begin a detailed review and targeting studies at Desdemona, followed by heritage surveys and initial field reconnaissance before conducting drilling operations.
CGN Managing Director Stan Wholley says the acquisition is a “genuine step-change” in the company’s growth strategy, allowing the company to expand its landholding in Leonora.
“CGN already held a highly prospective footprint, but the addition of the Patronus project elevates us to a new level, positioning the company among the largest landholders in the Leonora District,” Wholley says.
“The consolidated package captures some of the most sought-after geological settings known to host significant gold deposits.
“It offers everything required for project growth: the right gold-bearing stratigraphy, outstanding access, multiple nearby processing options and a proven history of gold endowment, supported by numerous walk-up drill targets.”
CGN Resources is focused on unlocking Western Australia’s mineral potential through its portfolio of assets across the state.
Write to Maddison Elliott at Mining.com.au
Images: CGN Resources
