Scorpion Minerals expands Murchison footprint with E79 Gold Jungar Flats farm-in deal
Scorpion Minerals (ASX: SCN) plans to commence drilling as soon as possible on new gold targets in the Murchison Province of Western Australia it has acquired through a farm-in agreement with E79 Gold Mines (ASX: E79).
Scorpion can earn up to a 70% stake in the Jungar Flats gold project owned by E79 subsidiary E79 Exploration by spending at least $3 million over a 5-year period, including a cash payment of $100,000 and various other milestones.
The company is now the largest landholder in the Murchison’s under-explored Dalgaranga–Big Bell shear corridor.
Gold ‘hotspot’
Scorpion chief executive officer Michael Fotios said the company had expanded its Murchison acreage to 1,600 square kilometres in an area that had been confirmed as a gold “hotspot” by significant exploration success.
The Jungar Flats project is adjacent to Scorpion’s existing 100%-owned Pharos project.
The two take in the northern extent of the Big Bell–Dalgaranga corridor.
Proposed RC drilling
Scorpion plans to follow up on historic high-grade results and conduct regional soil geochemical sampling with a reverse circulation (RC) drilling program that it expects to commence by March.
To support the program, Scorpion has received firm commitments for a $1.5m placement to sophisticated investors at $0.02 per share.
Key contractors will also be able to convert $332,000 of trade payables and a drill-for-equity payment of $200,000 on the same terms as the placement.
Recent attention
“With the Murchison region gaining recent attention due to exciting gold discoveries made by neighbouring companies such as Spartan Resources (ASX: SPR) and Caprice Resources (ASX: CRS), our plans to accelerate exploration across our high-grade target areas have been very well received by existing shareholders and new investors.”
“Drilling contractors [are] already secured and we plan to have rigs mobilised by the end of February, with drilling to commence shortly thereafter.”
“In a strengthening gold environment, we anticipate a strong pipeline of news flow over the coming months as activity increases and exploration results come to hand.”
Positive outcomes
E79 chief executive officer Ned Summerhayes said the farm-in arrangement with Scorpion Minerals delivers several positive outcomes for his company’s shareholders.
“We reduce our expenditure commitments while remaining exposed to any exploration success going forward, with the joint venture allowing us to focus on our 100%-owned near-term discovery opportunities at the Laverton South and Mountain Home projects.
“We look forward to working with the Scorpion Minerals team going forward—they have a track record of discovery and the Murchison assets will benefit from being part of a larger-scale regional play.”