Capricorn Metals to acquire prospective Ninghan gold project in WA from Sabre Resources

Capricorn Metals (ASX: CMM) will pay $1.6 million to acquire the prospective Ninghan gold project tenement package in Western Australia’s Murchison district from Sabre Resources (ASX: SBR).

The company has made an upfront deposit of $100,000 and will pay the balance of the consideration in Capricorn shares valued at the 20-day volume-weighted average price prior to completion of the deal.

Further consideration includes the grant of a 1% net smelter return (NSR) royalty on the sale of any minerals on all tenements other than E59/2402, where a 1.5% NSR royalty applies.

Milestone payments

Capricorn has also agreed to make up to $1.75m in contingent milestone payments to Sabre on the commencement of a maiden drilling program, the announcement of a mineral resource estimate of more than 50,000 ounces of gold and the decision to start a commercial mining operation.

The divestment of Ninghan will provide funds for Sabre to advance its other exploration opportunities in Western Australia and the Northern Territory.

The parties expect to complete the transaction in May, subject to procedural diligence and conditions precedent.

Mt Gibson footprint

Capricorn executive chair Mark Clark said the acquisition would complement the company’s existing portfolio.

“The Ninghan gold project continues the expansion of our Mt Gibson exploration footprint and adds highly prospective targets very close to those resources,” he said.

“It provides us with an outstanding exploration opportunity which could add meaningful ore sources to Mt Gibson and we look forward to commencing active exploration on the project later this year.”

Project location

The Ninghan gold project covers approximately 77 square kilometres of tenure contiguous to the north of Mt Gibson and features multiple settings conducive to hosting economic gold deposits.

Historical gold exploration in the area had been limited to early-stage activities, predominantly in the mid-1990s.

More recent exploration efforts have underscored the potential of the project to support new near-surface satellite resources and significant gold discoveries.

Exploration zones

Capricorn has identified seven zones for exploration within the Ninghan tenure.

The highest-priority among these are located 20 kilometres north-north-east of the current Mt Gibson resource and in close proximity to the Great Northern Highway.

The zones are geologically analogous to Mt Gibson’s main mineralisation and feature historic workings in shear zones along a contact of metamorphosed and chlorite-biotite-muscovite–altered mafic volcanics.

Mr Clark said the Capricorn team would use techniques including broad-scale geological and regolith mapping and geochemical sampling to capitalise on Ninghan’s resource potential and confirm targets for future drilling campaigns.