Accelerate Resources Expands WA Gold Portfolio with Balagundi Earn-In Agreement
Accelerate Resources (ASX: AX8) will boost its gold portfolio in Western Australia with an earn-in agreement over the historical Balagundi project near Kalgoorlie.
The company signed the deal with a private vendor and it represents a significant step in the company’s strategy to consolidate highly-prospective, under-explored tenure in the eastern goldfields region.
Consideration for the earn-in will comprise an upfront payment of $45,000 plus 10 million Accelerate shares, after which Accelerate will have the right to earn up to 80% interest in the project by spending $3 million over 48 months.
Structurally Complex Location
Balagundi is located over 27 square kilometres of contiguous tenure in a structurally-complex corridor of the Norseman-Wiluna greenstone belt, a proven setting for high-grade orogenic gold.
Historical production at the adjacent Queen of Balagundi and Mt Bellew mines validated the area’s vein-hosted systems and identified large undercover zones and targets that have not seen modern drilling.
Significant historical assays include 37 metres at 1.45 grams per tonne gold from 32m, 6m at 1.86g/t gold from 30m, and 3m at 4.3g/t gold from 60m.
The intercepts contain elevated pathfinder elements (such as arsenic and tungsten) and coincident gravity anomalies, indicating the presence of a larger system.
Minimum Expenditure Proviso
The earn-in terms state that Accelerate must commit a minimum expenditure of $500,000 within the first 12 months, and pay a $20,000 fee on each anniversary of the agreement during the earn-in period.
The company must also make non-cumulative milestone payments of up to $200,000 on the release of pre-determined mineral resource estimates, with the vendor retaining a 20% free-carried interest until Accelerate announces a resource of more than 500,000 ounces gold.
On completion of the earn-in, Accelerate will issue the vendor a further 10 million shares and the partners will make a decision to contribute jointly or dilute the joint venture.
Where dilution by either party equates to less than 5%, that amount will automatically convert to a 1.5% net smelter return royalty.
Discovery-Ready Project
Accelerate chief executive officer Luke Meter said Balagundi was a discovery-ready project with many historic high-grade results and potential targets.
“It hosts numerous shallow workings and shafts along high-grade quartz veins, a rich nugget field, and vast untested zones with little to no modern exploration over the last 25 years,” he said.
Accelerate has planned a staged exploration program to unlock Balagundi’s full potential, including detailed structural mapping and geochemical surveys, along with high-resolution geophysical programs to refine its understanding of mineralisation controls across the tenement package.
“Together with the Kanowna East project, we are forging a highly-prospective gold exploration hub within 20 kilometres of Kalgoorlie that will be capable of providing low-CapEx potential to fast-track future discoveries.”