Sunshine Metals (ASX:SHN) has agreed to buy the Sybil Epithermal Gold Project from a private party for $1.225 million.
The new asset aligns with the company’s strategy to identify shallow oxide gold resources around the Charters Towers area in Queensland.
Consideration for the deal is $125,000 in cash, and the issue of $1.1 million worth of shares when certain resource and production milestones are reached.
The acquisition is expected to be completed in July, with field work scheduled to begin in August this year.
A maiden JORC-complient resource estimate of 100,000 ounces gold from the project will see $300,000 in shares payable, with another $300,000 in shares payable following an estimate of 200,000 ounces gold.
Sunshine, which has a market capitalisation of $14.61 million, will issue $500,000 worth of shares within 14 days of starting mining at Sybil.
Following the first 300,000 ounces of gold produced, there is a 1% net smelter royalty on production that the company retains the right to buy back from the vendor.
Managing Director Damien Keys says the project will expand the company’s reach across the Charters Towers area, with potential for “exceptional” near-surface gold drilling and rock chip sampling results.
“Sybil shares many commonalities with the 4 million ounce gold Pajingo Mine near Charters Towers in that both are epithermal gold systems of the same age, hosted in similar rocks and sharing the same geochemical signatures,” Keys says.
“There is a fantastic opportunity to apply recent learnings on epithermal systems to a well mapped region that has not been extensively explored.”
Previous drilling at the Francis Creek prospect within Sybil returned results across 6,107m, including 7m @ 10.6 grams per tonne gold from 7m, 3m @ 23.2g/t gold from 6m, and 6m @ 10.5g/t gold from 7m.
Rock chips of 907g/t gold and 262g/t gold were also identified, with a bulk sample producing 961 tonnes @ 7.6g/t gold for 235 ounces.
Sunshine Metals is an Australian exploration company focusing on the discovery and development of its projects across Queensland.
Write to Maddison Elliott at Mining.com.au
Images: Sunshine Metals
