OD6 Metals (ASX:OD6) has entered into a tenement sale agreement to buy the Historic Gulf Creek Copper Project in New South Wales from Jonathan Downes.
Following today’s announcement, OD6’s share price jumped over 134% to an intra-day high of $0.068.
The project is considered to be one of Australia’s “highest grade” copper-zinc volcanogenic massive sulphide (VMS)-style deposits and was mined over 100 years ago between 1896 and 1912.
Under the agreement, OD6 will pay Downes a non-refundable cash deposit of $50,000. The company will also pay $150,000 and issue 6 million shares to the seller.
On completion of the agreement, OD6 will issue shares to the seller with a deemed value of $200,000 based on the volume weighted average price, subject to shareholder approval. If shareholder approval is not obtained, the company will pay $200,000 cash to the seller.
Managing Director Brett Hazelden says the company has reviewed over 40 potential projects and has now settled on the licence over the historic Gulf Creek Mine and its surrounding areas.
“The project was mined at the turn of the last century, between 1896 and 1912, with very high-grades averaging 2 to 6.5% copper within the three main lodes,” Hazelden says.
“Exploration prospectivity is immense as there has been no modern exploration of substance since the mine closed, with only two drillholes completed more than 60 years ago.
“We intend to apply modern exploration technologies and have identified the linkage between copper and magnetite in the shallow historic workings. Based on a review of a recent 2021 drone magnetic survey there is potential of over 10km of untested magnetic VMS target horizon.”
Hazelden adds that the company is committed to advancing this prospect and the opportunity to build a larger copper-focused portfolio.
The company notes that historic workings at the project will form the basis of initial exploration. The last drilling conducted was during the 1960s with two holes drilled.
As Gulf Creek has seen little modern exploration, OD6 says there are numerous untested targets, alongside the potential for a “larger and more expansive high-grade” copper-zinc system with multiple repeat structures.
A phase-one program has been designed to test the area in and around the historical workings and is fully permitted to begin early next year.
The permitted program will comprise diamond or reverse circulation drilling of 14 holes for 1,500m to 3,000m.
OD6 aims to investigate the use of downhole geophysics as a suitable targeting technique for mineralisation within 100m of drillholes.
After drilling is completed and assays are received, the company will plan, permit, and implement a phase-two drilling program.
The company will also examine re-processing and reinterpretation of induced polarisation and drone magnetics with the latest modelling techniques.
Further, a new drone geophysical survey across the whole tenement will also be considered.
OD6 has also planned extensional exploration near Gulf Creek and regional exploration surrounding the project.
The Gulf Creek Project covers 2,375 hectares and lies near Barraba, 400km by road to the port of Newcastle. The project is hosted along the Peel Fault and encompasses the historic Gulf Creek and Murchison copper mines.
OD6 Metals is an explorer and developer focused on opportunities within the energy transition sector. The company has identified clay-hosted rare earths at its wholly owned Splinter Rock Project in Western Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: OD6 Metals
