Pacgold (ASX:PGO) has entered into a profit share agreement with Grainger Gold over its Wadnaminga Project, located 80km southwest of the White Dam mine site in South Australia.
For each quarter in which gold is mined, extracted or recovered and sold, Pacgold will pay Grainger Gold a 50% net profit after tax received from the sale of that gold.
During the term of the deal, Grainger Gold agrees to maintain the mining leases in full force and keep the mining leases in good standing and free from any liability to forfeiture. Pacgold shall manage all expenditure associated with the development and processing of the mining area and shall maintain accurate records of all such costs and expenditure.
Grainger Gold will also pay all rents, rates and taxes and other outgoings in respect of the mining leases. The company will also allow Pacgold to enter and access the mining area at all times and.
Pacgold will be responsible for obtaining and complying with any mine approvals and program of works required to be obtained from the Department of Energy and Mining in connection with the mining operations conducted on behalf of Grainger Gold and any mining proposal, excess tonnage, closure plan and rehabilitation obligations.
The existing heap leach pad and tailings dumps will be drilled and samples to measure the remaining gold resource available for immediate re-treatment in conjunction with exploration drilling of the known mineralised extensions where ore has previously been delineated.
Pacgold says the key opportunity exists in discovering potential thicker, lower grade zones than those historically mined and mineralisation outcropping or proximal to the surface.
Fieldwork is expected to begin next month, with an exploration permit application to be submitted as soon as practicable to begin drilling and evaluation works.
Managing Director Matthew Boyes says the company continues to expand its footprint in the Broken Hill region and add potential short-term sources of ore to be leached at the White Dam facility.
“The deposits at the Wadnaminga site have never been systematically explored and the old timers were focused on the ounce grade dirt, leaving behind any material with sub-bonanza grade,” Boyes says.
“This represents a real opportunity for Pacgold to quickly delineate a resource and fast-track to mining.”
Wadnaminga was mined extensively during the late 1800s and 1900s, producing a record 19,962 ounces of gold across four main locations. No systematic drilling on the asset has been carried out.
Pacgold is a mineral explorer and developer focused on pursuing large-scale discoveries alongside a clear path to near-term production.
Write to Aaliyah Rogan at Mining.com.au
Images: Pacgold
