Australian Gold and Copper (AGC) has launched its $10 million initial public offering bringing to the market three gold projects located on the best exploration address in NSW, the Lachlan Fold Belt, which is the 700km-long structure running from central NSW to eastern Victoria.
The projects are being divested by Magmatic Resources (ASX: MAG) and privately held New South Resources, allowing both companies to “focus on their East Lachlan porphyry projects”.
All three of the projects held by the new AGC are described in the prospectus as having geological similarities to existing successful gold projects.
The two vending companies decided their pure, near surface gold projects would be better in a new vehicle, creating a combined portfolio of drill ready gold targets in the Central Lachlan. Funds being raised will enable a significant discovery focussed drill program to commence across seven drill ready targets very soon after listing on the ASX.
High level IPO terms
AGC is seeking between $7 million and $10 million.
The IPO will offer a maximum of 50 million shares (a minimum of 35 million shares) at $0.20 each.
If that maximum is reached, those participating in the IPO will between them hold 50% of AGC.
The projects being contributed to AGC are being valued at $10 million. In return for vending the projects, Magmatic and its shareholders will receive about 24% of AGC, while New South Resources and shareholders will hold 16% of AGC (with significant levels of escrow expected).
AGC’s ground covers 1,000 square kilometres and comprises three projects, all described as drill-ready and, in the case of two of them, described as having multiple targets.
All three projects ‘drill-ready’
There is the Moorefield project just north of Condobolin, encompassing 477sq km; the Cargelligo project is 15km from the town of Lake Cargelligo and is 227sq km, while the Gundagai project lies south of Cootamundra and covers 265sq km.
Moorefield is described as having a geological links to the Bendigo zone of the central Victoria gold fields including the Fosterville mine operated by Kirkland Lake Gold (ASX: KLA).
It also has Cobar-style polymetallic targets.
Obvious drill targets based on presence of significant existing historic drill results include 36m at 1.21 grams per tonne gold from 81m, 30m at 1.6g/t, 19m at 1.28g/t and 15m at 1g/t.
Records of alluvial mining go back to 1894 while the historic Boxdale mine began production in 1955.
Cargelligo is seen as having Cobar and Hera-mine style gold and polymetallic targets. The Hera reference to the mine of that name operated by Aurelia Metals (ASX: AMI).
This project has a 15km-long trend having been identified and supported by geophysics and historic gold shows.
Includes multiple drill ready Cobar-style gold-polymetallic targets, characterised by coincident conductors identified by a recent government airborne EM Survey (Geological Survey of NSW), EM plates, IP targets, historic drill intersections and anomalous surface geochemistry.
AGC says a McPhillamys signature has been recognised at its Gundagai ground, that being similar to NSW next major gold mining development the multimillion McPhillamy’s mine owned by Regis Resources (ASX: RRL), which is an overlooked gold target style in NSW.
The company notes that there have been strong surface geochemistry results over 1.5km and recent rock chip samples have returned up to 35g/t gold. Gundagai is within a historic mining district.
Looking to mine by open pits
Gundagai has been under-explored for almost 50 years, the company claims.
Chairman David Richardson says AGC’s focus will be on exploring its multiple gold targets that are near surface and/or outcropping, and which have the potential to be mined by open pits.
“The board believes this will lead to near-term exploration success, building shareholder value early in the history of the company,” he added.
The IPO is due to close on 18 December and the company expects to begin trading on the ASX on 5 January 2021 under the “AGC” ticker. It will commence a substantial drill program to test its multi-project portfolio not long after.
The lead manager is Taylor Collison.