Western Australia-focused explorer DiscovEx Resources (ASX: DCX) is forming an alliance with gold project developer Capricorn Metals (ASX:CMM), buying an adjacent project and getting Capricorn as a 12% shareholder.
DiscovEx is acquiring the 2,247 sq km Sylvania project in the Pilbara, which it describes as “highly prospective” for gold and base metals and a “transformational” deal for the junior.
Capricorn has taken $1.2 million of the $3.5 million placement raised to acquire the project with that company’s chief executive officer, Kim Massey, to join the DiscovEx board.
Another $500,000 will be raised through a share purchase plan.
The new DiscovEx ground is next door to Capricorn’s 2.1 million-ounce Karlawinda gold project, which is expected to pour its first gold this year.
DiscovEx will acquire the private company owning Sylvania, Lighthouse Resources Holdings. To make this possible, gold explorer Gateway Mining (ASX: GML) will surrender its stake in Lighthouse and will become a 4.55% shareholder in DiscovEx.
The ‘right’ underlying geology
Sylvania includes the Prairie Downs zinc-lead-silver deposit, which has an inferred and indicated mineral resource, and an iron deposit.
DiscovEx said the entire project is significantly under-explored for gold.
The company claims the ground’s geology is consistent with that at three major gold projects in the Pilbara — Karlawinda, Paulsens (+1 Moz) and Ashburton (+ 2 Moz).
DiscovEx managing director Bradley Drabsch said it has always been the company’s aim to conduct serious, early-stage exploration in areas of Western Australia that have received little attention but have the right underlying geology.
“With this latest acquisition, we are giving our shareholders the opportunity to again be exposed to systematic, broad scale exploration, specifically targeting the discovery of new, large gold systems,” he added.
Very little serious past gold exploration
Mr Drabsch said apart from the zinc and iron deposits, Sylvania has showings of copper and nickel mineralisation.
“We can’t wait to get stuck into exploring this region,” he said.
Exploration for gold in the region has been limited generally to only early-stage efforts, mostly undertaken during the mid-1990s, and there has been little serious focus on gold and very few drill holes completed outside the Prairie Downs resource — this in spite of substantial evidence of widespread gold mineralisation in the region.
Mr Drabsch said DiscovEx will also continue exploring its other WA projects, Edjudina and Newington.
Sylvania consists of seven granted exploration licences and 12 licence applications.
It lies 50km southwest of the Newman iron ore hub.
DiscovEx’s motto is “Putting the exploration back into modern exploration”.