Gold explorer Draig Resources (ASX: DRG) has gained more ground in Western Australia’s mid-west after securing an option to acquire the Yandal South project from Croft Mining and Weebo Exploration.
The 557-square kilometre project is near to Draig’s Bellevue gold project, which historically product 800,000 ounces of gold at an average 15 grams per tonne grade. Yandal South is also close to Echo Resources’ Bronzewing project and processing plant, and Red 5’s Darlot gold asset.
As part of the acquisition, there are six exploration licences and one exploration application. Draig has 45 days to undertake due diligence and with a A$20,000 option fee. If Draig elects to exercise its option, it must pay $100,000 and issue the vendors 3 million ordinary Draig shares.
This latest acquisition will boost Draig’s land holding in the region to more than 1,400sq km.
According to Draig, Yandal South is prospective for gold and base mental and is relatively under-explored.
Draig executive director Steve Parsons said the company believed Yandal South was highly prospective, which was enhanced by the project’s location between two known gold producing camps.
“The Yandal South project is only 40 kilometres east of our core asset the Bellevue gold project, enabling exploration to be more easily undertaken and any future discovery to complement the Bellevue project,” Mr Parsons added.
He said Draig would be carrying out due diligence at Yandal South followed by geological targeting.
Bellevue Gold Project
However, Mr Parsons cautioned the company’s focus would remain on advancing Bellevue, which for more than 100 years, hosted gold operations before closing down in 1997.
After acquiring Bellevue, Draig started its own exploration program targeting both underground and open pit gold potential.
Due to its proximity to other gold operations and Leinster, Bellevue has access to infrastructure including grid power, sealed roads, water, and existing services at nearby towns Leinster, Leonora and Wiluna including an airport.
A drilling program is currently ongoing at Bellevue with the company anticipating assays into early 2018.
Draig announced in late-November its drilling campaign had returned narrow intervals of shallow gold grading up to 37.5g/t (5m width) at the project.
By early afternoon trade, Draig Resources’ share price had dipped 2.13% to sit at A$0.23.