Junior explorer Marquee Resources (ASX: MQR) is set to acquire the West Spargoville gold and nickel project in Western Australia’s goldfields region after entering into an option agreement with private company Fyfehill.
Under the terms of the agreement, Marquee will pay Fyfehill a non-refundable $200,000 upfront fee, after which it will be granted an 18-month exclusive option to buy the project for an additional $500,000 in cash and a 2% net smelter royalty.
During the option period, Fyfehill will allow Marquee to conduct exploration activities at West Spargoville using its own funding and bringing with it any plant and machinery required.
Marquee executive chairman Charles Thomas said the acquisition comes after a nine-month search for a project that will allow it to capitalise on a rising gold price.
“We have undertaken due diligence on numerous [opportunities] with a view to acquiring brownfield gold projects which will enable our shareholders to be exposed to the expected increase in the price of gold in the coming years,” he said.
“The option to acquire West Spargoville, which is located in a prolific gold and nickel district, is the first step in this continuing strategy,” Mr Thomas added.
Containing over 20km of continuous strike over approximately 80km of the Kambalda district, West Spargoville sits at the northern end of the world-class Widgiemooltha greenstone belt, which is synonymous for gold and nickel discoveries.
It is nearby to mining licences owned by Maximus Resources (ASX: MXR), the St Ives gold project owned by South African major Gold Fields (NYSE: GFI), and the Higginsville gold operations owned by Canada’s Karora Resources (TSX: KRR).
West Spargoville’s project area is bound to the east by the Zuleika Shear and by the Ida Fault to the west, within a ‘neck’ of greenstones, which are large internal felsic intrusive bodies within the sequence.
It is believed to be underlain by a sequence of mafic intrusives and volcanics, and layered mafic rocks with komatiites, high-magnesium content basalts and gabbros, which are prospective for gold and nickel mineralisation.
Recent exploration in the area by the likes of Ramelius Resources (ASX: RMS), Breakaway Resources, Harmony Gold and Mithril Resources (ASX: MTH) has identified new prospects and mineralisation within the belt and confirmed its prospectivity.
Marquee today confirmed it has received “firm commitments” in a placement to sophisticated and professional investors to raise $1.6 million.
The company has agreed to issue up to 40 million fully paid ordinary shares at $0.04 per share over two tranches in July and August.
It also intends to issue 40 million free attaching options on a one-for-one basis to all placement participants.
At midday, shares in Marquee Resources were trading 92.5% higher at $0.077.