An ongoing strategy of project generation has seen Zenith Minerals (ASX: ZNC) secure the Auburn exploration licence as its second gold asset in Queensland.
The project is located within the Auburn portion of the Connors-Auburn Arc, which is a tectonic unit that forms part of the New England orogenic belt extending from Queensland into northern New South Wales.
Government mining records confirm gold activity was conducted across the area in the 1880s through to the early 1900s.
Many of the old workings were covered by small mining leases in the 1970s and 1980s, however there has been no on-ground exploration for the past 25 years.
Previous work consisted of reconnaissance sampling and mapping by companies including Newmont Corporation and Compass Resources.
A series of “poorly documented” historic trench sampling and drill hole summaries are believed to be encouraging but “cannot be relied upon”.
Zenith’s initial on-ground exploration at Auburn has confirmed the presence of widespread gold mineralisation at surface in association with historic gold workings.
A first-pass systematic soil sampling program by Zenith over the central portion of the Auburn project area has defined several strong gold anomalies.
Three of these are associated with historic gold mines with strike lengths of up to 600m and another three extend away from known gold workings.
The company reported a peak soil result of 1.1 grams per tonne gold.
A reconnaissance mapping and sampling program also confirmed the presence of high-grade gold at surface.
Nine out of 49 rock samples returned grades greater than 1g/t gold and a peak value of 23.3g/t.
Anomalous trace elements associated with the samples included silver, arsenic, bismuth, lead and tellurium and are believed to be consistent with an intrusion related gold system.
Zenith said it would eventually spin-out Auburn and its other non-battery minerals projects (including base metals and gold) into new companies for listing on the ASX.
The move would align with the company’s strategy of advancing its battery minerals assets, including Split Rocks and Waratah Well which are operated under a lithium joint venture with EV Metals Group.
Any proposed spin-out would be subject to standard approvals, and Zenith shareholders would benefit by way of an in-specie distribution of shares in the new companies.