Labyrinth Resources (ASX:LRL) has entered into an option agreement with Olympio Metals (ASX:OLY) to buy the Mulwarrie and Mulline gold projects in Western Australia for up to $1.375 million.
The Mulwarrie Project is located 120km west-northwest of Kalgoorlie in Western Australia and has previously been covered by soil, auger soil, or lag sampling. The Mulline Project sits a further 15km from Mulwarrie along the unsealed Davyhurst-Mulline road.
Labyrinth’s wholly owned subsidiary Orminex West has obtained a three-month option for $50,000 to purchase the two projects.
If the company exercises the option, it will pay Olympio $100,000 cash and issue $225,000 worth of Labyrinth shares.
Labyrinth, which has a market capitalisation of $124.36 million, will also pay $1 million in cash or shares to Olympio upon defining a resource of over 250,000 ounces of gold at a minimum grade of 1.4 grams per tonne.
CEO Charles Hughes says this strategic, low-cost option aligns with Labyrinth’s objective of acquiring underexplored gold tenure in the Eastern Goldfields.
Meanwhile, Olympio Managing Director Sean Delaney says this agreement is a good outcome for the company, allowing it to focus on its other assets.
“Labyrinth is consolidating their land position around Menzies and aggressively focusing on gold exploration in the area and we wish them all the best,” Delaney says.
This news comes after Liontown Resources (ASX:LTR) withdrew from the farm-in agreement over the Mulwarrie Project tenements.
At the Mulwarrie Project, most work was undertaken between 1982 and 1990 by Pancontinental Mining. Exploration primarily focused on gold and resource evaluation.
Labyrinth says there are several strong, consistent gold soil anomalies of more than 10 parts per billion (ppb) interpreted throughout the Mulwarrie Project area. The soil anomalies and associated structural trends correlate with known historic prospects and geological contacts within the areas, providing immediate drilling targets.
At the Mulline Project, there are also several strong, consistent gold soil anomalies more than 10ppb. At exploration tenement E30/512, there is a strong and coherent over 10ppb soil anomaly that stretches 9.2km over the same lithological sequence that is seen at Mulwarrie.
Labyrinth Resources is a gold explorer based in Western Australia. The company is focused on underexplored projects close to existing infrastructure.
Olympio Metals is a Western Australian explorer primarily focused on the discovery and development of critical mineral projects.
Write to Aaliyah Rogan at Mining.com.au
Images: Labyrinth Resources
