Australian gold and base metals explorer, Musgrave Minerals Limited (ASX: MGV) updated the market on the commencement of the aircore drilling on Lake Austin area on the Company’s flagship Cue Gold Project.
The Lake Austin area is considered to be highly prospective for gold and is significantly underexplored. Currently, this area is being drilled as part of the Musgrave’s Earn-in and Exploration Joint Venture (JV) with Evolution Mining Ltd (ASX: EVN), which was signed in September 2019. The initial diamond drilling program at Lake Austin North is already completed, with assays expected in in March 2020.
The aircore drilling program will test four target areas and will consist of more than 20,000m and 200 drill holes. It is expected that the drilling will take around three months to complete and the first assays results will be released in April.
The drilling will also be used for testing the bedrock interface in some drill holes. Geochemically anomalous areas will require follow-up basement drill testing to define their economic gold potential.
Evolution’s Plan Under JV Agreement
Evolution has agreed to spend a minimum amount of $4 million over the first two years and can earn a 75% interest in the Joint Venture area by sole funding $18 million in exploration. However, if Evolution failed to spend the entire $18 million within five years, Musgrave has the choice to retain 100% ownership. Musgrave is managing the exploration in the first two years.
During December 2019 quarter, Musgrave received $1.5 million from Evolution Mining Ltd for a share subscription linked to the JV.
It is to be noted that the existing gold resources including Lena and Break of Day and the Mainland option area are excluded from the Evolution Agreement and Musgrave holds 100% interest of these tenements.
Ongoing Exploration at Musgrave’s 100% tenements
At Break of Day, one of the priority targets of Cue Gold Project, Musgrave recently resumed reverse circulation (RC) drilling to confirm the new ‘link-lode’ hypothesis and test for possible additional ‘link-lodes’ along the strike of the Break of Day resource. The first assays from this are expected in March 2020.
RC drilling testing the new high-grade gold discovery at the Consols prospect, within the Mainland area, is currently ongoing, with first assays expected in late March 2020.
At Lena, the company is planning to deliver a resource update in Q1 2020. The Lena deposit consists of a number of gold lodes, with some having significant high-grade potential at depth.
With the cash call from Evolution Mining Ltd and $4.1 million cash in hand at the end of December Quarter, Musgrave is currently well funded to undertake exploration activities as part of the upcoming field season.
While the company has made substation progress in the development of its Cue gold project in the past few months, it has also been able to increase its shareholder’s wealth. As per ASX, in the last three months, MGV stock price has increased by 22.97%. By AEDT 12:58 PM, MGV stock was trading at a market price of $0.092, near to its 52 weeks high price of $0.100.
Musgrave believed in substantial potential to uncover new gold deposits and widen current mineralisation within the Project area, as validated by the recent drilling success at Lena, Break of Day, Mainland and Lake Austin North. The company aims to evaluate alternatives to establish a low-cost operation, capable of delivering robust shareholder returns.
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