Dark Horse Resources (ASX: DHR) has leapt into New Zealand’s gold space after signing a binding term sheet to acquire a majority interest in several properties including 75% of the Cap Burn gold project.
All assets, including Cap Burn, are located on New Zealand’s South Island in the Otago region, which Dark Horse describes as “gold-rich”.
At Cap Burn, comprehensive surface exploration has unearthed rock samples assaying up to 3 grams per tonne gold over 6 square kilometres.
Dark Horse noted the samples were interpreted to be similar to OceanaGold’s (ASX: OGC) nearby Macraes mine.
Large NZ footprint of prospective gold properties
The company’s newly acquired landholding in Otago encompasses 445sq km and Dark Horse managing director David Mason pointed out the assets will be secured for “no upfront cost”.
Under the binding term sheet, Dark Horse will acquire a 75% stake in Cap Burn. It will also secure 100% of the Rock and Pillar prospecting permit application (PPA) which surrounds Cap Burn.
Another PPA has been submitted for Filly Burn, which is adjacent to Macrae, while an exploration permit has been applied for that covers Wild Dog Creek which is also adjacent to Macrae.
A PPA has also been lodged for Raggedy Range.
Cap Burn gold project
Cap Burn is the most advanced of the properties with drill ready targets.
The project covers 19.5sq km and is north-west and along strike of Macraes. Between 1990 and 2019 about 5Moz of gold has been produced from Macraes, with OceanaGold generating 172,475oz from the asset in 2019.
Macraes has a measured and indicated resource of 3.5Moz.
Dark Horse claims the NZ gold projects afford it an opportunity “closer to home” in a “sought-after mining jurisdiction”.
“Otago, NZ is a world class gold mining jurisdiction and cements our mission to provide geographical diversity within our gold portfolio,” Mr Mason added.
Drilling has been planned to begin late 2020/early 2021 during the NZ summer.
Under the deal, Dark Horse will spend NZ$600,000 on exploration at Cap Burn over the next 18 months to acquire 75% of the asset.
Once Dark Horse has completed this, the vendors may elect to either retain their respective interest or sell it to Dark Horse. The vendors also have a third option to revert to a 0.5% net smelter royalty plus a NZ$500,000 payment each.
Collectively, the vendor is known as Mineral Rangahau JV and comprises three equal partners.
In relation to the PPA assets, Dark Horse has the first right of refusal to acquire 100% of Rock and Pillar, Raggedy Range and Filly Burn, plus other permits the vendors had applied for or recommended to the company.
For these assets, the vendors will receive an aggregate 2% NSR. Dark Horse noted Wild Dog Creek is included in the arrangement because the vendors recommended the project.
Mr Mason said Dark Horse was “well funded” to advance exploration at the NZ projects in addition to its other assets in Finland and Argentina.
“It is important to note that there has been minimal cash required for us to secure this package of properties in NZ, and ongoing maintenance costs are relatively low.”
“Dark Horse looks forward to the exciting upcoming months to put plans and drill designs in motion to forward the company’s standing and progress and then aim of defining a JORC gold resource within one year,” Mr Mason added.