Musgrave Minerals’ September Quarter Results: Significant Drilling continues at High priority Targets

  • Oct 25, 2019 AEDT
  • Team Kalkine
Musgrave Minerals’ September Quarter Results: Significant Drilling continues at High priority Targets

Australian resources company, Musgrave Minerals Limited (ASX: MGV) is focused on gold exploration and development at its Cue Project, located in the well-endowed, gold producing Murchison region of Western Australia. The Cue Project hosts significant gold resources of 441koz gold.

The year 2019 turned out to be a successful year for the company, with Musgrave’s positive and extensive lake drilling campaign, the discovery of gold mineralisation at Lake Austin North and the divestment of the base metal interests on the northern Cue tenements.

During the year, the company was busy refining its exploration portfolio, applying for additional tenements in the Cue region and divesting the Corunna Project in South Australia. Exploration and evaluation costs totalling $336,589 were impaired during FY19.

Musgrave’s Strategic Focus

The company intends to maximise its exploration strengths and accelerate drilling across high priority targets including Mainland, Lena, Break of Day and Lake Austin North. Musgrave’s goal is to make high-grade gold discoveries which could support a stand-alone operation or alternatively be mined in partnership with an existing producer.

September Quarter Exploration update of High priority targets

During the September quarter, the company undertook several exploration activities at the high priority targets to make new gold discoveries and extend the existing resources of the project.

Lena Deposit

At Lena deposit, a part of Cue Project, the company drilled three Reverse Circulation (RC) and five Diamond Drill (DD) holes to extend the resource down dip at the deposit.

Notable intercepts recorded during the drilling include:

  • 1m @ 25.7g/t Au from 110m down hole (19MORC014) and
  • 24m @ 3.2g/t Au from 140m down hole (19MORC014) including;
    • 4m @ 13.1g/t Au from 151m, and
    • 1m @ 42.8g/t Au from 153m
  • 2.2m @ 6.5g/t Au from 261.8m down hole (19MODD016) including;
    • 0.6m @ 14.3g/t Au from 261.8m, and
    • 1.7m @ 6.3g/t Au from 289.2m
  • 0.7m @ 74.7g/t Au from 314.0m down hole (19MODD017)

A reassessment of historical drilling data at the Lena deposit has highlighted a 500m long high-grade shoot and the potential to grow the resource at depth.

Break of Day

During the September quarter, the company also undertook additional extensional RC drilling at Break of Day. In the process, various holes successfully intersected high-grade gold outside the current JORC resource boundary. The mineralisation at Break of Day is still open along strike and down plunge.

Notable intercepts include:

  • 1m @ 8.0g/t Au from 26m down hole (19MORC012)
  • 2m @ 9.0g/t Au from 71m down hole (19MORC015)
  • 3m @ 13.9g/t Au from 53m down hole (19MORC017) including;
    • 2m @ 20.0g/t Au from 53m.

The company believes that the new intercepts have the potential to extend the Break of Day mineralisation to both the north and south from the current resource. Additional follow-up drilling at Lena and Break of Day is expected to commence in early November.


In March 2019, the company executed an Option Agreement to acquire the Mainland tenements near Cue. During the quarter, Musgrave completed an RC drilling program to initially test three targets at the Mainland area.

The company drilled eleven holes for 1,373m and intersected 3m @ 5.4g/t Au from 74m down hole (19MORC008) at the Mainland-Consols target.

Rock-chip sampling over selected areas at Mainland has identified a surface iron-quartz breccia sample that assayed 3,499g/t Au with visible gold obvious in the sample which was discovered in an area with minor historical workings but no historical drilling.

The company expects follow-up drilling at Lena to commence in early November.

Lake Austin Region

At the Lake Austin area which is now the part of the new Evolution Earn-in and Exploration Joint Venture, multiple zones of anomalous regolith gold have been identified. These zones are adjacent to the A-Zone and many of them are still open along strike with further regolith drilling required to define their limits.

The combined basement strike potential of the Lake Austin North system is now over 8km which is equal to ~ 7% of the basement target zone tested to date. This demonstrates the significant upside potential of this gold system and the large financial commitment to exploration required to fully drill test the system’s economic gold potential.

Cyprium exercised option for non-gold rights

Cyprium Australia Pty Ltd exercised an option to acquire the non-gold rights over the northern base metal tenements at the Cue Project including the Hollandaire deposit, in May 2019. Cyprium can earn an 80% interest in the non-gold rights by spending $2 million in two years.

Notable results during September quarter can be READ HERE.

Forward Plan

  • In late October 2019, the company is expecting further assay results from Lena’s DD campaign. Musgrave is also working towards a resource upgrade in the first quarter of 2020.
  • In early November, the company will commence a follow-up RC drilling of recent high-grade gold drill results and surface rock-chip samples at Mainland; and at the same time, the company has also scheduled a further drilling at Lena and Break of Day to extend and grow the existing resources.
  • Musgrave and Evolution Mining Ltd (ASX: EVN) are working together (as part of recently executed JV Agreement) to formulate the follow-up drilling programs at Lake Austin North and other lake targets.
  • To evaluate options to optimise cash flow and maximise shareholder returns, Musgrave is undertaking development studies on the Break of Day and Lena gold deposits.

Cash flows Analysis

During the quarter, the company spent $698k on exploration & evaluation activities, while aiming to maintain the same in the subsequent quarter. At the end of the quarter, the company had cash and cash equivalent of $2.65 million, which further increased to $4.7 million (as on 24 October 2019), including $1.5 million received from Evolution share subscription subsequent to the end of the quarter.

At market close on 25 September 2019, MGV stock was trading at a price of $0.077. The stock has provided a return of 24.2% over last six months.


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