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Australian gold explorer, Musgrave Minerals Limited (ASX: MGV) has released its first half results of FY20 today. Over the period, the company extensively carried out exploration activities on its mineral tenements at its Cue Project, both on a joint venture basis and by the company in its own right.
The Cue Project is located in the Murchison region of Western Australia and hosts significant gold as well as copper mineralisation. As a result of continued exploration progress during the half-year, Musgrave was able to increase gold resources at the Project. While doing this, the company was also able to bring itself to profitability.
Also Read: Musgrave Welcomes Glittering Hopes As High Grade Gold Intersected Link-Lode At Break Of Day
Financial Update
On financial front, the company reported a profit of $0.15 million during the half year, as compared to a loss of $1.07 million on PCP. Consequently, the company reported a basic and diluted profit per share of 0.04 cents per share.
Over the period, the company witnessed a net cash inflow of ~$223k from operating activities and made payments of around $1.13 million on exploration activities.
The company ended the half-year with a cash balance of $4.09 million. It is to be noted that this cash balance includes amounts held for the Evolution Joint venture for budgeted and approved earn-in expenditure. As at 31 December 2019, the Company held $499,677 in unexpended cash calls for Evolution Mining Ltd (ASX:EVN) .
At the end of the period, the company had total current assets of $4.81 million and total current liabilities of $1.09 million.
Operations Summary
Over the half year period, Musgrave was busy capitalising on its exploration strengths and accelerate drilling programs across a range of high priority targets at its Cue gold Project, which includes Lena, Mainland and Break of Day, along with JV with EVN over Lake Austin North prospect.
With the recent Lena’s Mineral Resource update, the Cue’s total gold resources have been increased to 6.45Mt @ 3.0g/t Au for 613koz Au.
Also Read: Musgrave Minerals: Junior Explorer Discovering Gold at Murchison Region of Western Australia
Lena Deposit
Last month, the company provided an update for the Lena deposit wherein it announced that Lena resource has increased to 4.3Mt @ 2.3g/t Au for 325koz contained gold, representing a 112% increase (172,000 ounces gold) in total contained ounces, as compared to previous Mineral Resource, underpinned by the highly successful reverse circulation and diamond drilling programs completed over the past six months.
Lena prospect also represented 72% uptick in the Indicated Resources to 121k gold ounces and 25% increase in the gold grade to 2.3 grams per tonne.
Break of Day
At Break of Day, Musgrave has intersected high-grade gold south of the existing resource on the Twilight Lode, with significant intercepts including:
- 6m @ 81.7g/t Au (20MORC001)
- 3m @ 13.9g/t Au (19MORC017); and
- 2m @ 9.0g/t Au (19MORC015)
At Break of Day, the Company intersected a new ‘link-lode’ structure striking perpendicular to the dominant orientation of the mineralisation within the boundaries of existing resource and parallel to previous drilling.
Mainland
At Mainland, Musgrave has intersected high-grade gold at the Consols prospect. Notable intersections from this include:
- 2m @ 55.4g/t Au (19MORC020)
- 3m @ 38.2g/t Au (19MORC018)
Musgrave has already started a follow-up drilling further test the extents of the mineralization. The results from this are expected to come out in March 2020.
Evolution Joint Venture
In September 2019, Musgrave entered into an Earn-In and Joint Venture Exploration Agreement with Evolution Mining Limited over a selected area of Lake Austin, and as part of the agreement Evolution subscribed for 18,587,361 ordinary shares in Musgrave via a share placement at a price of $0.0807 per share.
Also Read: Musgrave Minerals: Aircore Drilling Commenced on Lake Austin under Evolution JV Agreement
As part of the Musgrave’s Joint venture with Evolution Mining, four diamond holes at Lake Austin have been completed for 1,504m. In early February 2020, a large regional aircore drill program was commenced at Lake Austin to define the geological stratigraphy below the lake sediments and identify regolith geochemical gold and pathfinder dispersion halos for future basement drill testing.
Musgrave Minerals seems to be well positioned to tap the market opportunity presented by gold commodity as safe haven, while continuing to focus on seeking extensions of project areas, new areas with mineral potential, access new opportunities for JV/acquisition as well as undertake development studies to gauge options to maximise shareholder returns and optimise cash flow.
MGV stock settled the day’s trade at $0.074 on 13 March 2020.
