Gold exploration and mining company Dampier Gold Limited today announced the acquisition of 80% interest in two exploration projects located approximately 100 km north of the Kalgoorlie gold mining district in Western Australia. The purchase includes the exploration license application for Menzies and Goongarrie project tenements.
In order to give an effective shape to the transaction, Dampier Gold Limited (ASX: DAU) has inked a binding Terms Sheet with ASX listed Magnum Mining & Exploration Limited and the Vendors, Discovery Capital Limited. Under the terms and conditions of the agreement, Dampier has issued 10,000,000 fully paid ordinary shares and has made a cash payment of $20,000 to acquire 80% holdings in each of the two projects.
Menzies is located adjacent to the Menzies gold camp, west of the Menzies townsite in Western Australia. The project contains the exploration potential for the gold hard rock and placer target along 196sqkm on strike. Whereas, Goongarrie which is on the southwest of Menzies represents a substantial potential of grassroots gold and base metal play. The tenements are located on strike and between the Kalgoorlie Shears and K2, illustrating the presence of suitable lithologies and structures which typically host gold mineralization associated with greenstone belts.
The company believes that both these projects will provide the cost-effective exploration opportunities as they lie within the mineralized belts where the company has turned the grass root discoveries into successful mining operations. More on the consideration front, Vendors Discovery Capital have the option to elect Dampier to contribute their 20% pro-rata share on all future expenditure on either of the Menzies or Goongarrie projects provided Dampier spends $300,000 on each of the tenements. Otherwise, the vendors may decide to receive a 2% gross royalty on either the Menzies or Goongarrie projects.
Directors of Dampier Gold Limited have pitched the positive outlook for further gains and current spot gold price. Further, the company intends to explore both the projects in this coming field season with the objectives to drill targets by the end of June quarter.
The tenements across both Menzies and Goongarrie have had minimal modern exploration carried out, and their exploration applications are said to be ready for approval. Dampier stated that the gold hard rock target is possible a westerly extension of the prolific Menzies greenstone belt and the paleo placer represent a new Tertiary channel target eroding the Menzies Gold Camp. Moreover, the central part of Goongarrie reportedly suggests a stoping of the greenstone similar to the Goongarrie goldfield located approximately 30-40km to the east.
In the separate announcement to ASX, the company has also revealed the change in the substantial holding of Vango Mining Limited. With effect from 4 January 2019, the substantial holder Vango Mining has increased its interest in Dampier Gold from 21.46% to 23.42%. As a result, Vango Mining now holds 38,786,191 shares in Dampier Gold Limited.
DAU traded flat on 7 January 2019. The last traded share price of Dampier Gold’s securities is $0.037 with a market capitalization of $6.13 million. Over the past 12 months, the stock has plunged by 28.85%, but on the positive side it has surged up by 12.12% in the last three months.