Musgrave Minerals well Positioned for Potentially Highly Profitable Gold Development

  • Oct 17, 2019 AEDT
  • Team Kalkine
Musgrave Minerals well Positioned for Potentially Highly Profitable Gold Development

Gold and base metal explorer Musgrave Minerals Limited (ASX: MGV) is currently focussed on growing its gold resources at its Cue Project, located in the well-endowed, gold-producing Murchison region of Western Australia. The project is believed to have excellent infrastructure with multiple operating gold mills in the district. The project has a total mineral resource of over 440koz Au (gold) with huge upside exploration including the potential to make further new gold discoveries with +28km of shear zone.

Recently at the Brisbane resource Round up event, the company provided an exploration update on its Cue Gold Project.

Cue Project Location on Map (Source: Company Reports)

Musgrave believes that it has the right ingredients for potentially highly profitable gold development. These ingredients include:

  • High-grade gold
  • Infrastructure
  • Excellent met work
  • Granted Mining Lease
  • Exploration upside
Earn-in Joint venture with Evolution Mining

In the update, the company has reminded about the $18 million Earn-in Joint venture between Musgrave and Evolution Mining Ltd centered on the Lake Austin Area of the Cue project. The company believes that JV agreement is reinforcing confidence in lake gold potential.

Agreement Highlights:

  • EVN will fund $18 million over five years to earn 75%;
  • Minimum spend of $4 million within the first 2 years;
  • MGV to manage during the initial earn-in period;
  • Musgrave will retain 100% of all known gold resources and approximately 11km of the prospective shear zone (including all near surface – non covered zones);
  • EVN has subscribed for $1.5 million of shares at $0.08/share.

In the update, the company also shed light on Break of Day & Lena gold deposits, both part of Cue Gold Project.

Break of Day JORC Resource:

  • 868kt @ 7.15g/t Au for 199koz Au (56% indicated)
  • >800m of the combined strike of high-grade shoots
  • Resource drilling only to ~250m
  • Amenable to open pit and underground mining
  • Open down plunge and along strike

Lena JORC Resource:

  • 682Mt @ 1.77g/t Au for 153koz Au (46% indicated)
  • Near-surface gold in multiple lodes over 1.6 km strike
  • Resource only calculated for top 160m
  • Open down plunge
Upsides of Break of Day

As announced on 9 October 2019, Musgrave has identified High-grade gold at Break of Day with mineralisation extending to the south with drilling intersecting: 3m @ 13.9g/t Au from 53m down-hole (19MORC017) including 2m @ 20.0g/t Au from 53m down-hole.

The Break of Day deposit has a JORC (Joint Ore Reserves Committee) 2012 Resource of 868Kt @ 7.15g/t Au (gold) for 199Koz Au and has a significant potential at depth and along strike to grow improve the existing resource. The company has planned further drilling at this deposit for early November to improve resource.

Lena Growth Potential
  • Multiple high-grade hits outside current resource boundary
  • 500m long high-grade shoot – awaiting drill results
  • Significant potential to grow resource – Open down plunge

The company has reported excellent gold recoveries from metallurgical test work at Break of Day and Lena:

  • Total 96-97% recoverable gold from conventional gravity and cyanide leach processing
  • Very high gravity recoveries (73-84%) - fresh rock
  • Very high in comparison to typical Yilgarn gold ores
  • 34%-55% gravity recovery from oxide and transitional material at Lena

The company is waiting for further results for Lena extensional drilling.

Forward Work plan of Musgrave Minerals

For the fourth quarter of 2019, the company has planned various activities which includes Soil geochemical & geophysical surveys; Diamond Drilling - Lena – Assays pending; RC Drilling – Break of Day, Lena and Mainland and Development Studies. Many of these activities will be continued to the first quarter of 2020. Additionally, the company will undertake Aircore Drilling (New targets - Mainland) in Q1 FY10.

Scheduled Work Plan (Source: Company Reports)

A Quick look at the Board and Management

  • Graham Ascough (Non-Executive Chairman)- Successful geoscientist with >25 years exploration and corporate experience (Ex Falconbridge)
  • Robert Waugh (Managing Director)- Geologist with over 25 years of exploration experience (Ex WMC & BHP). Strong discovery track record.
  • Kelly Ross (Non-Executive Director) - Accountant and Chartered Secretary with over 25 years’ experience in the mining industry;
  • John Percival (Non-Executive Director) - Over 25 years’ experience in broking, investment and merchant banking.

As at 9 October 2019, the company had a cash balance of ~4.1 million. At market close on 17 October 2019, MGV stock ended at a price of $0.079 with a market capitalisation of $31.21 million.


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