Provenance Gold (CSE:PAU) has increased the size of its Eldorado Gold Project in Oregon after staking additional ground and securing an option agreement.
The explorer, which has a market capitalisation of C$31.2 million ($35 million), has added a further 18.33km2 to its Eldorado landholding, creating what Provenance calls a “district-scale opportunity”.
Provenance has been granted an option to acquire the Sunday Hill Property, which includes the historical 231,000-ton Sunday Hill Mine where a near-surface gold-bearing zone averaging 23.15 grams per tonne was previously discovered.
The US$400,000 ($625,116) option agreement with Nevada Select Royalty, a subsidiary of Gold Royalty (NYSE:GROY), covers 10 mineral claims and represents about 0.8km2 of the new ground.
The Sunday Hill Mine was drilled and re-evaluated by Capri Resources in the 1980s, with the zone discovered reported to be within 10.7m of the surface and measure around 7.6m thick, widening to 18.3m at its deepest underground exposure, 61m down dip.
Provenance says the gold zone remains open in all directions.
The deal also covers the historical Randall Mine, which is believed to host another near-surface open-ended gold zone containing a historical resource of 207,000 tons @ 8g/t gold just 500m south of Sunday Hill.
A historical surface soil map prepared by Capri shows a gold enriched soil zone that connects the Sunday Hill and Randall deposits and extends beyond the edge of the soil grid.
Additionally, Capri reported that in 1926 a weighted average for 21 samples of 5.75g/t gold was sampled across a 1,189m by 152m area of altered diorite located proximal to the Sunday Hill and Randall Mines.
Meanwhile, Provenance also staked 285 mineral claims covering 17.52km2 5km east of the Eldorado property and a further 14 mineral claims spanning 1.05km2 about 1km northeast.
The company says historical reports dating back as early as the 1920s and 1930s report numerous locations and zones of strong gold mineralisation, including projected bulk-tonnage mineralisation across the new claims, extending far beyond Sunday Hill. With the new ground, the Eldorado Project area now spans 22.95 km2.
In late April, Provenance began a phase-one reverse circulation drilling program at the project.
CEO Rauno Perttu says Provenance recognises the size and potential of the original area which is a key part of what the company believes is a new large-scale gold district.
Provenance believes the near-surface historical gold mineralisation in and around the Mormon Basin is part of a potentially large bulk gold system that includes both the original Eldorado and the new Eldorado East expansion.
The company has begun initial ground truthing, data compilation and review work.
“While we remain focused on expanding and exploring the significant already known potential at Eldorado, we are delighted to be able to secure the Eldorado East land including the Sunday Hill Property, making this a new district scale opportunity,” Perttu says.
“With this acquisition and expansion, we believe we additionally control what may become the next major discovery in this new district.
“The back loaded nature of the terms of this option agreement mean there is no material impact on the company’s available funds for the initial reverse circulation drilling program which is fully funded.”
Under the option agreement, Provenance will make six staged payments of US$400,000 through to February 2030.
Upon exercise of the option, the company will grant to Nevada Select a 3% royalty on net smelter returns from the project, with 1% eligible to be bought back for US$2 million.
Write to Angela East at Mining.com.au
Images: Provenance Gold
