Fraser Range Metals Group Limited (ASX: FRN) announced that it has entered into a conditional binding term sheet to acquire Wildcat Resources Limited, the holder of Mount Adrah Gold Project in NSW.
The project is situated in the Lachlan Orogen, which contains globally significant gold orebodies in the 36.6M oz Au Cadia and 6.1M oz Au Cowal deposits.
This is a large exploration tenure within a well-endowed gold system that is under-explored for both high grade and bulk tonnage gold.
It may be noted that the Mount Adrah Gold project hosts the Hobbs Pipe gold deposit, with an existing JORC 2012-compliant Mineral Resources estimate of 770,000 oz Au.
The acquisition is expected to be completed by the end of October.
Wildcat holding: Mount Adrah gold project
Wildcat currently holds the Mount Adrah Gold Project, a highly prospective 200km2 tenement package located 44km from Wagga Wagga, 330km WSW of Sydney in the far western part of the well- mineralised Lachlan Fold Belt.
The project includes the Hobbs Pipe gold deposit which has an existing JORC 2012 -compliant Mineral Resource estimate of 20.5Mt @ 1.1g/t Au for 770,000 oz of contained gold; 12.1Mt @ 1.1g/t for 440,000 oz (Indicated Resources) and 8.4Mt @ 1.1g/t for 330,000 oz (Inferred Resources).
There are also a number of high-grade gold reef systems identified by historic artisanal workings and limited exploration drilling at Mount Adrah, like the Castor Reef, White Deer Reef, Stark Reef, and Targayan Reef.
Promising results at Mount Adrah
Very limited deep drilling at Mount Adrah had intersected the quartz-gold reefs down-dip from the artisanal workings, with high-grade intersections including 10m @ 17.7 g/t Au from 506m at the Castor Reef Prospect and 1.2m @ 58.6 g/t Au from 624m at the White Deer Reef Prospect.
A number of quartz vein reef-style targets were identified as targets of interest in a study by prior owners in 2016. Results on the follow-up work done on some of these targets have been promising to date.
Other Wildcat holdings
In addition to Mount Adrah, Wildcat also holds the Wellington Range manganese project in Western Australia. The project comprises three exploration licence applications (ELAs) approximately 140km east of Wiluna.
Terms of acquisition
The terms for acquiring Wildcat Resources states that Fraser Range will issue 63,875,000 Ordinary Shares to the Vendors at a deemed issue price of 1.6c per share, 67,000,000 A class Performance Shares to the Vendors on the terms and conditions set out in Annexure A; 67,000,000 B-class Performance Shares to the Vendors on the terms and conditions set out in Annexure A; and 20,000,000 unquoted Options exercisable at $0.04 each on or before the date that is three years after their issue.
The terms states that FRN should also issue 3,125,000 Ordinary Shares at a deemed issue price of $0.016 per Share to Force Commodities Limited, in part satisfaction of Wildcat’s obligations under the agreement to acquire Mount Adrah from Force.
Board changes
The Company reported that it intends to appoint to the board Matthew Banks as Executive Director and Alex Hewlett as Non-Executive Director. Director Zane Lewis will step down as a director on completion of the acquisition.
Next steps
FRN said that immediately post-completion of the acquisition, it intends to initiate systematic exploration of the Mount Adrah Gold Project.
A mapping and re-logging exercise was recently completed that is expected to assist in providing a framework to generate and rank targets and assist in refining the geological model for Hobbs Pipe.
The company said that it plans to do Geochemical sampling programmes over selected target areas to better define drilling targets.
The focus will then be on further drill-testing of the known high-grade gold reefs, as well as compilation and analysis of the significant existing geophysical, geochemical and geological data in order to develop new target areas within the less-explored portions of the tenure.
FRN said that further geological studies of the gold mineralisation at Hobbs Pipe would also be done in order to better understand the gold deposit. Its economic potential for the Company may also lead to the revision of the potential of the deposit.
Management comments
Fraser Range Director Aidan Platel said: “The Mount Adrah Project presents a fantastic opportunity for possible high-grade gold discoveries in the Lachlan Fold Belt, a region known for hosting large gold deposits.
The existing Hobbs Pipe resource provides a great starting base, but the potential of the known high-grade gold reefs and the opportunity to find more of them is what the Company finds really attractive.
We look forward to completing the acquisition and immediately initiating our exploration strategy to systematically test the priority target areas, which we believe will unlock significant shareholder value.”
