Taruga Minerals Ltd (ASX:TAR), inked a 12-month option agreement with Strikeline Resources to acquire 100% of the Flinders project. Taruga, an established base and precious metals explorer advances on the Yagahong North gold and base metal project.
Taruga has appointed an experienced South Australian geologist Thomas Line as the project manager of the Flinders project to assist the company’s activities during the yearlong option period. Mr Line, who has been responsible for the acquisition and exploration activities at the Flinders project till date will serves as a vendor to the project.
Taruga Receives Overwhelming Response from Investors, Well Placed to Pursue Flinders
Taruga has secured firm commitments worth $600,000 through equity placement of 60,000,000 shares at an issue price of 1 cent per share in compliance to the Listing Rule 7.1 and 7.1A of ASX. Ashanti Capital, a top tier speciality financial services firm, is managing the share placement which is expected to close on or around 19 May 2020. Shaw and Partners and Ashanti Capital, shall receive a facilitation fee equivalent to 6,000,00 ordinary fully paid shares and Options to be exercised for further 6,000,000 ordinary fully paid shares. Following the issuance of the new shares including the facilitation fees will account to ~16.9% of the total equity.
As per the recently published activities report for the March quarter, the company holds a cash of over $1.6 million without any debt. The lean balance sheet allows the firm to aggressively pursue its projects.
Flinders project stretches over 647 square kilometres and is located on the juncture of the two mega regional structural corridors hosting BHP’s behemoth Olympic Dam polymetallic and Carrapateena IOCG’s, Beltana Zinc and Leigh Creek Copper mines to name a few. The regional setting of the Flinders enhances the prospectivity with possibility of presence of multiple base and precious metals.
Source: Taruga Minerals
Flinders IOCG project is 80 kilometres from the Carrapateena, which hosts the OZ Minerals (ASX:OZL) Cu-Au UG mining operations and Fremantle Doctor and Khamsin IOCG’s deposit in the Yilgarn Craton with existing access to power, rail and port Augusta. The Flinders project was historically mined from 1863-1909, for extracting copper and later in 1980’s from the main lode Warrakimbo Range for Iron Oxide.
Presence of historical mining operations substantiates the prospectivity and with no major modern exploration in the last 5 decades makes the project ideal for Taruga’s exploration programs. The Flinders project shares the geological setting with the mega Olympic Dam (9,080Mt @ 0.87% Cu, 0.32g/t Au and 0.27kg/t U3O8) and Carrapateena (970Mt @ 0.5% Cu and 0.2g/t Au) deposits with significant exposed high grade mineralisation. The outcropping of the mineralisation to the surface usually indicates the suitability of the mineralisation through open-pit mining methods. The prospects include -
- Woolshed/Metabase - The Fe-Cu-Au-Ag prospects is located along a 2 kilometres long magnetic anomaly and contains strong gold and silver mineralisation with recorded grades
up to 4.7g/t gold and up to 25.6g/t silver along with heavy-rare-earth-elements
- Warrakimbo Main Lode – The historically mined prospect hosting Hematite-altered breccia containing high grade copper, cobalt, silver, gold and LREE. The mineralisation is open at depth and along the strike and is significantly underexplored.
- Rambla Prospect – The Cu-Ag prospect had been subjected to artisanal mining historically. Mined. The recent rock chip sample resulted in significant grades of 5.1% Cu and 5.7g/t Ag
The recent rock chip samples suggest presence of possible bulk mineralisation of high tenor. Further exploration to identify the targets for the drilling and exploration program will accelerate the project.
Systematic Exploration Program at Flinders to Lead the Way for Taruga
Taruga plans to undertake a systematic exploration approach at Flinders initially targeting the superficial, high grade Au-Cu-Ag mineralisation. An initial 6-month long exploration program has been proposed which will focus 6.4 kilometres long Warrakimbo Ranges IOCG targets and will include the following-
- Reprocessing of the government’s and company’s own Airborne magnetic and gravity data
- Reprocessing of 2009 government’s Magnetotellurics (MT) data from across the Warrakimbo Ranges’ strike
- Extensive soil/surface sampling mapping across Mt Stephen Thrust and Rambla Prospect deposits
- A high resolution gravity survey for identification of gravity anomalies and their coincidences to identify the priority targets for the further drilling program
Acquisition Agreement Terms
Taruga is required to pay a sum of $15,000 within 7 days of signing of the term sheet and $25,000 within 6 months. With Taruga spending over $250,000 on the exploration of Flinders project during the first year, it will be entitled to exercise the option to acquire 100% ownership of the Strikeline and the Flinders project.
Upon exercising the option to acquire 100% stake in the project, Taruga would be required to issue 40 million fully paid ordinary shares to the shareholders of Strikeline and make further payments in cash or stocks upon completing each of the three milestones which includes-
- A sum of $400,000 to be paid on estimation of a JORC compliant mineral resource of at least 150,000 copper equivalents
- A sum of $500,000 on completion of the bankable feasibility study for the project
- A sum of another $500,000 upon commencement of commercial operations at the project.
A Net Smelter Royalty (NSR) of 1% has also been agreed upon by both the parties in lieu of production of any precious, industrial minerals and base metals at the operations.
Taruga traded at $ 0.012 a share on 14 May 2020, with a market capitalisation of $3.89 million.
PS-All figures are stated in Australian Dollars, unless stated otherwise
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