Perth-based explorer Caprice Resources (ASX: CRS) has announced plans to acquire 100% of private company Goldview Metals Pty Ltd which owns the high-grade Island gold project, 630 kilometres north of Perth in WA’s Cue goldfields.
The project sits over 21sq km of prospective tenure nearby to mines of the historic Lake Austin gold mining district.
It comprises two granted mining leases and one exploration licence covering the New Orient, The Island and North Island properties, 20km south of the Cue township.
Consideration for the acquisition will include a $100,000 cash payment to Goldview plus the issue of 16.6 million Caprice shares to Goldview shareholders.
Approximately 70% of these will be issued to Goldview’s major shareholder Michael Caruso.
As part of the transaction, Caprice has agreed to cover a maximum $800,000 in unpaid invoices and expenses accrued by Goldview.
It will also meet exploration expenditure commitments of up to $1 million.
Mr Caruso will retain a 1.5% net profit after tax royalty over material processed from the project.
Caprice will retain the right to purchase the royalty for $1.5 million at any time before the commencement of production.
On completion of the acquisition, Mr Caruso will join the Caprice board as a non-executive director.
Acquiring the Island project will allow Caprice to test depth and strike extensions of the drill-ready New Orient, Baxters and Golconda prospects targeting Hill 50-style mineralisation.
These targets have had limited exploration to date, with Goldview drilling 6,174m between 2010 and 2016.
Significant intercepts from that program included 11m at 14.9 grams per tonne gold from 77m; 24m at 6.8g/t gold from 24m; 15m at 10.5g/t gold from 75m; 4m at 17.3g/t gold from 8m; and 3m at 24.3g/t gold from 27m.
A further seven regional targets have also been identified for immediate follow-up.
Caprice said it would launch a 3,000m maiden drilling program on completion of the project acquisition.
“We believe in the potential of the current targets to host a regionally-significant resource, particularly given the lack of systematic exploration,” the company said.
“Historical exploration at the project has been limited to surface prospecting, geochemistry and broad-spaced shallow drilling with exploration over the past decade constrained by funding, which relied heavily on gold recovered from prospecting activities.”
The Cue region is starting to experience high levels of corporate interest with Evolution Mining (ASX: EVN) recently committing $18 million in exploration funding to a joint venture in the area immediately surrounding the Island project.
Lake Austin area
The Lake Austin gold mining district was discovered during the 1890s gold rush and is characterised by rich zones of mineralisation hosted in bedrock and overlaying alluvials.
The main period of hard rock production occurred between 1894 and 1903, with a second period of activity in the 1930s for recorded production of 55,941 ounces averaging 40g/t gold.
Rytech Pty Ltd and Goldview produced a nominal amount of gold from the New Orient mine during the 1990s.
Mining operations in the area ceased mainly due to the perceived scarcity of the supergene gold at depth and modern exploration has been limited.
The Island project was subject to limited to no exploration between 1993 and 2010 due to applications against forfeiture and Native title issues.