Southern Cross Gold uses IPO proceeds to breathe new life into Victorian goldfields
Southern Cross Gold raised $9.1 million in its IPO to fund its exploration plans in central Victoria’s Melbourne zone.
Breathing new life into Victoria’s historic goldfields using modern exploration technology will be a priority for Southern Cross Gold (ASX: SXG) when it makes its ASX debut on Monday 16 May.
The entity was spun-out of Toronto Stock Exchange-listed Mawson Gold last year after Mawson decided it would focus its time and money on the flagship Rajapalot gold-cobalt project in Finland, which hosts an inferred resource of 1.04 million ounces at 3 grams per tonne gold equivalent.
Mawson established Southern Cross Gold as a vehicle for discovering and developing large, long-life, sustainable assets across Victoria’s rich goldfields and in parts of Queensland.
It will trade on the ASX using the ticker code “SXG”.
Initial public offering
In March, Southern Cross Gold launched an initial public offering, which raised $9.1 million (before costs) via the issue of 45.5 million shares at $0.20 each.
The company said it had attracted multiple big-name institutions to its register. Mawson Gold will remain the company’s largest shareholder at 60% and will be escrowed for two years to 2024.
Southern Cross Gold will combine the IPO proceeds with $2.2 million cash at hand to fund ongoing exploration at its projects and to acquire 300 acres of freehold land which forms a key portion of the drilled area at its key Sunday Creek asset.
Historic goldfields
Through wholly-owned subsidiaries, Southern Cross Gold owns or has rights over three of the nine historic epizonal goldfields in central Victoria’s Melbourne zone, over an area of approximately 471 square kilometres.
The subsidiaries have equity in the advanced Sunday Creek project; rights and interests to the Redcastle and Whroo projects under option agreements with Nagambie Resources (ASX: NAG); and a tenement package near Mt Isa.
In addition to the joint ventures with Nagambie, Southern Cross Gold holds a strategic 10% interest in Nagambie stock which brings with it the right of first refusal over Nagambie’s 3,300 square kilometre tenement package through central Victoria. Nagambie is also in the process of constructing a carbon-in-leach 180,000 tonne per annum gold processing plant on its property which could give Southern Cross Gold potential easy access to a regional toll treatment plant.
Previous drilling at Sunday Creek returned multiple strong intersections which Southern Cross Gold believes is potentially one of the “best new exploration discoveries to come out of Victoria in recent times”.
Highlights were 21.7m at 4.7g/t gold and 1% antimony (5.6g/t gold equivalent and considered an important by-product) from 274.7m, including 0.4m at 145.5g/t gold and 20% antimony (165.4g/t gold equivalent) from 364m, and 11.7m at 12.3g/t gold and 3% antimony (15.3g/t gold equivalent) from 364m. Antimony is considered an important critical metal potential by-product.
Southern Cross Gold aims to extend the strike and depth of known gold-stibnite mineralisation by oriented diamond drilling at the Apollo-Gladys prospect area while investigating the extent of mineralisation at the Golden Dyke target.
Drilling will then move to test regional targets up to 10km along strike from Apollo including Leviathan and Consols.
Further infill, semi-regional soil sampling and mapping will be conducted to better define soil geochemical anomalies.
High-grade intercepts
At Whroo, the first two holes drilled beneath the Balaclava open pit (which remains the largest historic producer in the area) returned high grade intercepts including 0.6m at 49.6g/t gold, which Southern Cross Gold said was “an extremely strong start” to testing the depth potential of the mineralised system.
The company has planned ground-based IP to map the “mine” sandstone sequence at Balaclava and follow-up diamond drilling along strike and to depth of past results to increase the geological understanding of the area and establish controls and potential vectors towards high-grade primary mineralisation.
Exploration is at an earlier stage at the Redcastle project, where Southern Cross Gold is assessing a number of past high-grade producers with a view to finding an analogue to the Fosterville gold mine (owned by Agnico Eagle) or the Costerfield development (Mandalay Resources) beneath one or more of the area’s old mines.
Exploration investment
Since acquiring its Victorian projects in early 2020, Southern Cross Gold has spent over $6 million on exploration activities including drilling, and ground magnetic and LiDAR (light detection and ranging) surveys.
Geophysical work and soil sampling at Sunday Creek have identified potential new target areas for exploration near to the current drill area as well as 10km to the east within the project’s 11km mineralised trend.
Exploration has also extended the mineralised trend at Whroo by 4km to 14km through a first-ever LiDAR survey of the area.
Queensland licences
Through Mawson Queensland, Southern Cross Gold also holds 861sq km of granted exploration licences in the Cloncurry district of Mt Isa, Queensland. The licences have a combined 60km of strike close to acreage held by South32 (ASX: S32) and Sandfire Resources (ASX: SFR).
The company is exploring for large iron-oxide-copper-gold (IOCG) and Broken Hill-type or Cannington-style lead-zinc-silver deposits in the Eastern Succession of the Mt Isa Block, which is entirely under cover (with estimated thicknesses of up to 400m) and virtually unexplored.
In 2019, Mawson Queensland flew 100m-spaced airborne magnetics and completed a ground-based gravity survey over the tenements to define magnetic anomalies, which included the multi-point definition of the priority F11 target.
The following year, it received a $200,000 grant under the Queensland Government’s collaborative exploration initiative to commence drilling at F11 — a program which featured only one hole drilled into basement rocks and identified “encouraging” zones of anomalous copper within a 10km radius.
Southern Cross Gold has ranked seven prospective drill-ready targets across its Queensland portfolio, all of which are considered high risk-high reward opportunities.