Exploration company Syndicated Metals (ASX: SMD) has entered into an agreement with Gateway Mining (ASX: GML) to purchase 80% of the highly-prospective Edjudina gold project in WA’s prolific southern Laverton district.
The acquisition will give Syndicated a major landholding in an underexplored area of the district, located 700 kilometres north-east of Perth, backed by a pipeline of exploration targets including the historic Hornet and Raptor prospects.
Key to the acquisition was the project’s proximity to major gold discoveries including the 10 million ounce Sunrise Dam mine owned by Anglogold Ashanti (ASX: AGG), the 2Moz Carosue Dam mine owned (Saracen Mineral Holdings, ASX: SAR) and the 500,000oz Red October mine (Matsa Resources, ASX: MAT).
There are also geological similarities between gold anomalies at Edjudina and early-stage exploration results from the 6Moz Tropicana gold deposit owned by AngloGold Ashanti Australia and Independence Group NL (ASX: IGO).
Gateway said the Edjudina divestment was part of a strategy to “crystallise value from its non-core exploration assets” while focusing on development of its flagship Gidgee gold project in the Gum Creek greenstone belt near Wiluna.
Under the terms of the agreement signed with Gateway subsidiary Gateway Projects Pty Ltd, Syndicated has the right to purchase an 80% interest in all four exploration tenements comprising the Edjudina project.
The company will conduct a due diligence process before month end, after which it will pay Gateway Projects $250,000 in consideration, of which $200,000 may be paid in Syndicated shares (based on the five-day volume weighted average price).
Syndicated will manage the joint venture and will grant Gateway Projects a 1.5% royalty on future production greater than 200,000oz of gold or equivalent.
Gateway Projects will be free carried until a decision to mine.
Syndicated managing director David Morgan said the acquisition represents a potential “company-maker opportunity” in a premier gold mining district.
“With the addition of Edjudina to our growing portfolio of gold projects in tier-one WA locations, [we are] well-positioned to benefit from exploration success in this current strong gold price environment,” he said.
Edjudina consists of four granted exploration tenements in the highly-mineralised Laverton Tectonic Zone of the eastern goldfields province of the Yilgarn Craton.
It is considered prospective for gold and nickel-copper mineralisation.
The core of the project covers a strike extent of approximately 29km within the Linden Terrain east of the Pinjin Fault over a north-northwest trending sequence of prospective greenstone, and is immediately along strike from Matsa’s 385,000oz Fortitude gold project.
Previous work on the Edjudina tenure – mostly during the 1980s and 1990s – included soil sampling, airborne and ground-based geophysics, air core drilling and minimal reverse circulation drilling.
Much of this work was done at a time when the gold price was less than A$435/oz – the hurdles to mining were much higher than in today’s A$2,100/oz environment.
Hornet and Raptor
Several gold-in-soil anomalies were identified during previous exploration efforts at the Hornet and Raptor prospects.
Both prospects were the subject of shallow aircore drilling to the base of weathered rock and both demonstrated significant, lateral and strike extensive unexplained transition gold anomalies.
Syndicated said it was particularly interested in Hornet, where two intervals at the transition from weathered rock to fresh rock – within what is logged as a mafic-rich variant of basement – remain open and unresolved.
The more prospective transition anomaly intersections were 3m at 1.6 grams per tonne gold, including 1m at 4.6g/t gold; and 1m at 2g/t gold.
“A small program of ineffective RC drilling was [previously] completed at Hornet but the holes were testing a geophysical anomaly and missed the more prospective geochemical and geological targets,” the company said.
“These two intersections, in context, present as very similar in nature to early intersections at the Tropicana gold deposit further east [which] also exhibited a very similar soil anomaly to that present at Hornet and Raptor.”
At mid-afternoon, shares in Syndicated were up 14.29% to $0.008, while Gateway was down 5.26% to $0.018.