PERTH: E79 Gold Mines Ltd. (ASX: E79) announced Thursday it has entered a binding agreement to acquire the Cue Gold Project, located in the highly prospective Day Dawn Goldfield of Western Australia’s Murchison region.
The company also said it secured binding commitments for a $3 million (Australian) capital raising to accelerate exploration at the new site.
The Cue Gold Project covers approximately 70 square kilometers immediately south of Westgold Resources’ high-grade Great Fingall Gold Mine. The project is considered geologically analogous to major deposits in the area, which are known for high-grade, quartz reef-hosted gold.
“The Cue Gold Project is situated in a discovery and M&A hotspot within one of the best gold addresses in Australia,” said E79 Gold CEO Ned Summerhayes in the announcement. “Not many junior explorers get the opportunity to secure ground with gold discovery potential like this in such a tightly-held region.”
The project has seen limited modern exploration, with previous efforts hampered by post-mineralization cover. E79 Gold plans to apply advanced techniques to explore under this cover and along strike extensions.
Historical drilling on the property has returned promising results, including an intercept of 13 meters at 2.2 grams per tonne of gold at the Ada prospect.
Concurrent with the acquisition, E79 Gold is appointing geologist Glenn Martin, who led the team on the nearby Break of Day discovery, as a technical consultant. Resources executive Matthew Bowles will join the board as a non-executive director.
The placement of 148.3 million shares is priced at 2.1 cents each, a 12.8% discount to the company’s 5-day volume-weighted average price. The funds will be used to complete the acquisition and fund initial exploration, including ground gravity surveys and drilling.
The acquisition of 90% of Cue Metals Pty Ltd., which holds the project rights, will see E79 Gold issue shares worth a total of $1.2 million to the vendors, payable upon completion and upon achieving certain tenement milestones.