Firefly Resources boosts gold exposure with Yalgoo acquisition

Firefly Resources (ASX: FFR) is the latest junior to up its gold exposure after revealing it is acquiring the Yalgoo gold project in Western Australia’s Murchison region.

The company is acquiring the project by purchasing private entity Aurum Minerals for $2.91 million-worth of Firefly shares.

To fund exploration, which will begin as soon as permitting allows, Firefly will raise up to $2.3 million.

This includes Aurum Minerals subscribing up to $1.15 million worth of Firefly shares.

Firefly will also undertake a share placement and non-renounceable entitlement offer to generate a further $1.17 million.

Yalgoo gold project

Yalgoo comprises 600 square kilometres of tenements and is 80km from Gascoyne Resources’ (ASX: GCY) Dalgaranga gold project which has an operating mill with up to 3 million tonne per annum capacity.

The project is close to Ramelius Resources’ (ASX: RMS) 6 million ounce Mt Magnet operation and Silver Lake Resources’ (ASX: SLR) Deflector copper-gold mine which has an JORC estimate of 2.2Mt at 0.6% copper and 800,000 ounces of gold at 0.9g/t.

Yalgoo has a historical resource of 2.75Mt at 1.57g/t gold for 140,000oz.

This was firmed up at the Melville deposit, which is within an unmined stacked lode system.

Previous drilling was contained to the first 150m within surface.

According to Firefly, the deposit covers 800m of known strike, with mineralisation open in all direction.

The company noted no meaningful drilling had been carried out since 2005 and the deposit had not been subjected to modern exploration techniques.

Notable historical drill results were 6m at 3.81g/t gold from 36m, including 3m at 6.60g/t gold; 5m at 24.35g/t gold from 42m, including 1m at 116g/t gold; and 7m at 24.49g/t gold from 93m, including 3m at 50g/t gold.

Nearby targets

In addition to Melville, other nearby gold targets have been identified at the project including Lady Lydia South, Don Bradman and Brilliant which have a combined historic resource of 13,500oz.

Once the acquisition has been completed, Firefly plans to upgrade Melville and other “suitable deposits” to JORC compliance.

This will be done through small in-fill drilling programs, with follow up resource upgrades to be undertaken through step out and deeper drilling campaigns.

Firefly noted that the project also hosted an “abundance” of historical workings which represent additional walk up drill targets.

The maiden exploration program will comprise 5,000m of reverse circulation drilling, 3,000m of auger drilling and a ground-based sub-audio magnetic geophysical survey.