Fraser Range Metals Group (ASX: FRN) emerged from a trading halt this morning with news it would acquire the Mount Adrah gold project in New South Wales.
Located in the Lachlan Orogen, Mount Adrah encompasses 200 square kilometres and hosts the Hobbs Pipe deposit which has a JORC resource of 20.5 million tonnes at 1.1 grams per tonne gold for 770,000 ounces.
A number of high-grade gold reefs have been identified at the project, with limited drilling returning 10m at 17.7g/t gold from 506m at the Castor Reef prospect and 1.2m at 58.6g/t gold from 624m at White Deer Reef.
Fraser Range director Aidan Platel said the project represented a “fantastic opportunity” for high-grade discoveries in a region known for hosting large gold deposits.
“The existing Hobbs Pipe resource provides a great starting base, but the potential of the known high-grade gold reefs and the opportunity to find more of them is what the company really finds attractive.”
In addition to its location within a known gold region, Mount Adrah is only 44km from Wagga Wagga and is close to rail and the Hume Highway.
The project also has available water and power and access to a skilled workforce.
Fraser Range is gaining Mount Adrah through the acquisition of Wildcat Resources by issuing 63.87 million ordinary shares to the vendors at $0.016 each.
The company will also issue a combination of performance shares and options amounting to 154 million.
Force Commodities (ASX: 4CE) will benefit from the deal, with Fraser Range to issue Force 3.125 million ordinary shares at the same price of $0.016 each.
Mount Adrah exploration strategy
As part of Fraser Range’s new exploration strategy, Zane Lewis will step down from the board once the acquisition has been completed.
He will be replaced by Matthew Banks who will have an executive role and Alex Hewlett who will assume a non-executive board position.
Immediately after the acquisition, Fraser Range will begin a systematic exploration program across the project.
Fraser Range has already completed mapping and re-logging and expects to carry out geochemical sampling to refine drill targets.
The initial focus will be Hobbs Pipe.
As well as gaining Mount Adrah through the transaction, Fraser Range will also secure the Wellington Range manganese project which is about 140km east of Wiluna in South Australia.
Fraser Range expects the acquisition will be complete by the end of October.
By mid-morning trade, Fraser Range’s share price had surged 25% to reach $0.025.