- Zenith Minerals is adding the Cowarra Gold Project to its portfolio via a result-based, staged equity investment in a pre-IPO vehicle.
- The investment would see Zenith own up to 22.5% equity in Oxley Resources, which wholly owns the Cowarra Gold Project in NSW.
- Through this opportunity, Zenith Minerals can potentially add to its gold inventory at a very competitive “discovery cost” in an underexplored region within the Lachlan Orogenic Belt.
Western Australia-based explorer Zenith Minerals Limited (ASX:ZNC) has bagged a lucrative opportunity that can potentially add to its gold inventory at a very competitive “discovery cost”.
A new gold feeder project is being added to the Company’s portfolio. The Company is making a result-based, staged equity investment in Oxley Resources Limited, which is a pre-IPO vehicle.
Notably, Oxley Resources owns the Cowarra Gold Project in NSW, which presents a compelling early-stage gold exploration investment opportunity. Oxley, an unlisted public company, is raising $270,000 in capital at $0.03 a share to fund the first phase of evaluation/confirmatory drilling.
Cowarra Gold Project & other key gold deposits of similar age in the Lachlan Orogen
Source: Company announcement, 13 May 2021
Zenith’s Staged Investment Approach In Oxley
First and foremost, it should be noted that Zenith’s investment in Oxley remains subject to these conditions precedent:
- Oxley is granted a licence to operate (Crown Land Licence) that enables exploration to proceed within state crown lands set aside for minerals on which the project resides.
- Oxley and Zenith should agree on the proposed exploration program and budget, in both cases.
The investment will see Zenith own up to 22.5% equity for $210,000 allocated in two stages. However, the Company can contribute to a subsequent Stage 3 investment of $250,000 within 12 months from Stage 1 investment.
At each stage along the investment pathway, the Company will evaluate if it should advance the project through additional funding, hold or reduce its position.
Significance of The Oxley Opportunity
For Zenith, the Oxley opportunity seems to be a good fit.
Through this opportunity, Zenith can potentially add to its gold inventory at a very competitive “discovery cost”. Notably, this opportunity is in a very underexplored region, compared to recent proxies located within the state of Victoria within the same Lachlan Orogenic Belt.
Executive Chairman Peter Bird explains that there is a series of very well-defined drill targets demanding a follow up around previously defined high-grade gold mineralisation. The Company remains keen on advancing the Cowarra Gold Project as a “feeder” into its current portfolio of projects.
It is to be noted that Zenith picked direct equity investment over a project-based transaction structure as it potentially provides a faster pathway towards monetisation. The approach also allows Zenith to focus on its existing core gold and copper projects and its own gold project pipeline in Western Australia and Queensland.
Coming Next - Walk-Up Staged Drill Program
A slew of activities are planned at the Cowarra gold project. For both open-pit and underground potential, a walk-up staged drill program will test the Victoria gold deposit.
An initial program of 7 x 100m depth holes will validate previous work and define a shallow gold mineral resource. Additionally, there appears a significant upside below the existing shallowly drilled prospects and targets.
The Cowarra Gold Project on NSW State Lands is set aside for minerals. Herein, permitting for drilling is well advanced. The drilling is likely to begin in the third quarter of 2021.
Cowarra Gold Project- An Overview
Oxley Resources wholly owns the Cowarra Gold Project (EL5992), which was previously mined by BHP in the 1930s and later by Horizon Pacific in the 1980s. Average run-of mine grades between 6 – 8 g/t Au were recorded. Besides, there was gold recovery by an industry standard carbon in leach on site processing plant.
Copyright © 2021 Kalkine Media, Source: Company announcement, May 2021
Below are the previous drill results from the regional prospects and targets of Victoria gold deposit that offer significant project upside-
- Democrat Prospect: 4m @ 10.5 g/t Au in CRC029 & 12m @ 1.9 g/t Au in CRC013.
- Ambassador Prospect: 8.1m @ 4.3 g/t Au in 10CWD-A1 & 1m @ 12.0 g/t Au & 5m @ 3.0 g/t Au in CWD101.
- Vanderbilt Prospect: 5m @ 4.2 g/t Au in CRC014.
- JMT Target: 75 rock samples over 1km of strike, average 6.1 g/t Au, no drilling to date.
On 24 May 2021, ZNC quoted $0.295 on the ASX.