Musgrave Minerals’ (ASX: MGV) Cue gold project in Western Australia’s Murchison region is now under the spotlight after Evolution Mining (ASX: EVN) agreed to spend $18 million on exploration over the next five years.
The $18 million outlay will give gold major Evolution a 75% stake in the project, with $4 million to be spent over the first two years.
In addition to the exploration expenditure, Evolution has agreed to subscribe for almost $1.5 million-worth of Musgrave shares at $0.0807 each. This will give Evolution a 4.59% interest in Musgrave.
Musgrave managing director Rob Waugh said the company was “very pleased” to partner with Evolution, with the joint venture expected to fast-track exploration at Cue.
“We look forward to leveraging Evolution’s extensive technical knowledge and financial resources with our in-house expertise to accelerate potential gold discoveries at Cue,” he added.
Cue gold project
Musgrave has firmed up a 28km long prospective gold corridor within Cue including the Break of Day deposit which hosts 858,000t at 7.15 grams per tonnes gold for 199,000 ounces.
The project also hosts the Lena resource of 2.68Mt at 1.77g/t gold for 153,000oz.
These resources and the Mainland option area within Cue have been excluded from the joint venture with Evolution.
However, Musgrave believes there is “significant potential” to extend existing mineralisation and discover new deposits within the project.
Evolution’s vice president discovery and business development Glen Masterman agrees – claiming Cue is a “quality project” with the ability to generate new drill results and extend previously identified mineralised zones.
The joint venture’s priority will be the Lake Austin portion of the Cue project where late last year diamond drilling unearthed thick gold intersections.
Notable results were 242m at 1g/t gold from 61m, including 45m at 3.3g/t gold from 70m; and 94m at 2.2g/t gold from 156m, including 52m at 3.8g/t gold from 198m.
The second intersection comprised two higher grade intervals 11m at 8.7g/t gold from 208m, and 4m at 8g/t gold from 239m.