Perth-based explorer Hammer Metals (ASX: HMX) has finalised terms for the proposed acquisition of all tenements within the Bronzewing South gold project from private company Carnegie Exploration Pty Ltd.
The junior today signed an agreement with Carnegie’s four shareholders which will allow for the purchase of all issued shares in Carnegie in return for fully-paid ordinary shares in Hammer to the value of $550,000.
The consideration does not involve any cash payments.
Based in the heart of the 24 million ounce Yandal greenstone belt in regional Western Australia, Bronzewing South consists of five granted exploration licences and two granted prospecting licences located 65 kilometres north-east of Leinster, over a landholding of approximately 111 square kilometres.
The licences are considered highly prospective due to the area’s disrupted exploration history and extensive blanketing by barren transported cover.
All are within a 20km radius of the mothballed Bronzewing processing plant owned by Echo Resources (ASX: EAR) which, in its heyday, had a production capacity of 2.5 million tonnes per annum.
The plant is currently the subject of a study to determine the feasibility of it re-opening as part of a new mining operation.
Once complete, the Bronzewing South acquisition will see Hammer secure underexplored terrain immediately along strike of the Echo’s 1Moz Orelia deposit and the 4Moz Bronzewing gold mine (currently on care and maintenance).
With limited previous drilling intercepting high-grade gold mineralisation in bedrock, Hammer chairman Russell Davis said the region’s high levels of gold mining and exploration activity auger well for the company’s newest asset.
“The Bronzewing South acquisition will give us strategic tenement positions in two of the world’s great mining provinces – Mount Isa in north-west Queensland and the eastern goldfields of WA,” he said.
“Yandal is an active mining jurisdiction and [these] tenements are all within a prime gold exploration location.”
Mr Davis said the company’s initial focus will be on detailed structural interpretation of previous drilling activity utilising high-resolution gravity and magnetic data, specifically targeting the productive Bronzewing and Orelia deposit structural trends.
Its planned exploration program will target “favourable structural orientations” within the mineralised corridors which remain untested.
At mid-afternoon, shares in Hammer were up 35% to $0.027.