Perth-based Talisman Mining (ASX: TLM) has secured a farm-in deal with privately-owned company Lucknow Gold Limited over the high-grade Lucknow gold project in New South Wales.
Under the terms of the deal, Talisman’s wholly-owned subsidiary Talisman B Pty Ltd has the right to earn up to 70% interest in the project by spending a minimum $1.5 million on exploration over a four year period.
At least $350,000 must be spent within the first 12 months, at which point Talisman B may elect to withdraw or continue the farm-in in order to gain a 51% legal and beneficial interest in the project by sole funding a further $350,000 the following year.
The deal will also provide for the issue of $250,000 worth of Talisman shares to Lucknow Gold, a portion of which will be granted upon cementing the terms.
Talisman managing director Dan Madden said the agreement was consistent with the company’s exploration and business strategy.
“Our business development [plan] targets advanced exploration or project development opportunities in gold and base metals where we believe we can generate value for [our] shareholders,” he said.
“Lucknow is located within the same broad area as our Lachlan copper-gold project and will enhance our exploration activities in this very prospective mining region.”
Earlier this year, a program of geochemical sampling at Lachlan, 200km from Lucknow, resulted in multiple new high-grade gold-in-soil targets which have been earmarked for future reverse circulation drilling.
Discovered in 1851, the Lucknow goldfield was one of the first in Australia to be commercially mined.
Records show almost 400,000 ounces of gold had been produced from the project at grades of between 100 grams per tonne and 200g/t gold.
Today, the Lucknow project hosts one of the world’s highest-grade historic gold mines, although little modern exploration has been completed outside of the existing mine workings.
The project also hosts extensive gold and copper mineralisation within the large Cadia-Ridgeway and McPhillamys deposits, as well as the Browns Creek, Forrest Reefs and Junction Reefs deposits.
Talisman’s initial exploration program will include surface geochemical sampling and mapping along the north-western extension of the major north-northwest trending Lucknow Fault.
Activities will then stretch further to the east along a north-south trending fault where previous sampling has identified copper anomalism and low-level gold anomalism.
The geological interpretation of the Lucknow goldfield will also be reviewed to gain a better understanding of the structural controls on gold mineralisation.
Once completed, the interpretation will be used to target untested down-plunge extensions of the historic high-grade, gold-bearing ore shoots and repeat structures throughout the area.
“There have been numerous recent examples in Australia of exciting gold discoveries being made by using modern exploration techniques to target depth extensions in known goldfields,” Mr Madden said.
“Lucknow is one of the world’s highest-grade gold mining areas with reported mined gold grades in excess of 100g/t, so there is a clear potential value of any new areas of mineralisation that can be identified.”
At mid-afternoon, shares in Talisman were up 3.09% to $0.10.