REG - Empire Metals Ltd - Tribute Agreement for the Eclipse Gold Project
26/01/2022 07:20
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RNS Number : 6803Z Empire Metals Limited 26 January 2022
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Empire Metals Limited / AIM: EEE / Sector: Natural Resources
26 January 2022
Empire Metals Limited ('Empire' or the 'Company')
Consolidation of Mineralised Footprint Around Eclipse Project through Tribute
Agreement to Access the Highly Prospective Gindalbie Gold Project
Empire Metals Limited, the AIM-quoted resource exploration and development
company, is pleased to announce that it has agreed Heads of Terms to enter
into a Tribute Agreement ('Heads of Terms') with Maher Mining Contractors Pty
Ltd ('Maher Mining'), giving Empire the right to explore, develop and mine
within a granted area on Maher Mining's 100% owned mining lease M27/158
('Gindalbie Gold Project'), located near historic gold mining town of
Gindalbie, and adjacent to Empire's Eclipse Gold Project ('Eclipse').
Highlights:
· Tribute Agreement would increase Empire's mineralised footprint
around its flagship Eclipse Project by over 200% to a total of 943ha.
· The Gindalbie Gold Project (the granted area contained within
mining lease M27/158) sits adjacent to the eastern border of the Eclipse
licence area and will extend the current area for exploration targets a
further 2km along the Eclipse lodes trend, plus 1km to the north and 3km to
the south.
· The "granted" area covers 643ha of highly prospective ground
containing a number of historical mines located along a series of
northwest-southeast striking mineralised trends.
· The main trend containing the Eclipse and Jack's Dream deposits
aligns with several of the old workings to the south including the Golden
Puzzle, and Bulletin mines. Three other, sub-parallel north-west - south-east
striking trends have been identified which combined with the Eclipse trend
provides an exploration target extending over a strike length of 8 km.
· The licence area has been subject to significant exploration in
the past, with a number of significant gold intercepts from historical RAB and
RC drilling, plus extensive soils and geochemistry surveys.
· The cost to enter into the Tribute Agreement is A$250,000 for an
initial 6-month exploration term. An additional A$250,000 is payable if Empire
elects to extend the exploration period by a further 18 months. Minimum
expenditure commitments during the two stages of exploration are A$250,000 for
each period.
· There can be no certainty that the Tribute Agreement well be
entered into or that the terms of the Tribute Agreement will be materially the
same as the Heads of Terms.
Shaun Bunn, Managing Director, said: "We are very pleased to reach an
understanding with our neighbour at Eclipse, Maher Mining, which allows us to
explore and if successful, develop a mine within their mining lease. Extending
our exploration into this new area, in parallel with further phases of
drilling into the primary mineralisation at Eclipse, offers the potential to
develop a significant increase in the scale of mineralisation in the field.
This is an exciting opportunity, significantly expanding our exploration camp
in the Gindalbie goldfields and opens the door for further development and
acquisitions in this region."
Key Terms of the Tribute Agreement
Empire has entered into a Heads of Terms with Maher Mining for a Tribute
Agreement giving Empire the right to explore, develop and mine within a
granted area on Maher Mining's 100% owned mining lease M27/158, subject to the
following key terms:
Ø In consideration of Empire paying an amount of A$250,000 within 14 days of
signing a detailed legally binding Tribute Agreement, Empire shall have an
initial period of six months to explore within the 'Granted Area' of the
tenement and will commit to an expenditure of not less than A$250,000 during
that period (the 'Exploration Period').
Ø Empire can elect to extend the Exploration Period by a further 18 months
(the 'Extended Period') to carry out further exploration and complete mining
studies, subject to paying Maher Mining A$250,000 and committing to a further
expenditure of not less than A$250,000 during the Extended Period.
Ø If, within the Extended Period, an economically mineable resource is
established, as determined by a Pre-Feasibility Study (as that term is defined
in the JORC Code 2012), then Empire may elect to mine the relevant part or
parts of the Granted Area upon the terms and conditions set out in the Tribute
Agreement.
Ø If, at the end of the Extended Period, further exploration and mining
studies are required to complete a Pre-Feasibility Study then Empire has the
option to extend the Extended Period by up to 12 months, subject to paying
Maher Mining the amount of A$250,000.
Ø If Empire elects to commence mining operations and subject to all statutory
approvals being met, then Empire will:
· pay Maher Mining the amount of A$500,000 within ninety (90) days of
the granting of a mining permit;
· grant Maher Mining a 2% net smelter royalty on all gold and other
commodities produced;
· guarantee to pay Maher Mining an additional 2% NSR for any gold
production sold between A$2,400/oz and A$2,799/oz, increasing to 3% NSR for
any gold production sold at A$2,800/oz or above; and
· guarantee to spend not less than A$250,000 on exploration per annum
on the Granted Area over the subsequent four (4) years;
in consideration for the rights to all ores mined during the granted term of
the mining licence, due to expire 3 November 2034.
Ø Empire will be the manager of the Granted Area from commencement of the
Tribute Agreement and will have the sole right to undertake exploration,
development and mining activities on the Granted Area.
Ø There can be no certainty that the Tribute Agreement well be entered into
or that the terms of the Tribute Agreement will be materially the same as the
Heads of Terms.
Gindalbie Gold Project
The Gindalbie Gold Project lies adjacent to Empire's high-grade Eclipse Gold
Project, a 303 ha mining lease located near the historic gold mining town of
Gindalbie, situated 55 km north-east of Kalgoorlie (refer Figure 1). Empire
Metals currently holds a 75% interest in the Eclipse Gold Project, together
with an option to acquire the remaining 25% interest.
Figure 1. Location Map - Location of Eclipse Gold Project (red), which
contains the old Gindalbie townsite, and mining lease ML 27/158 (blue) which
contains the Gindalbie Gold Project.
Gindalbie was an active gold mining centre around the turn of the last century
with most gold production being in the period 1887 to 1913, with some in the
late 1930s to early 1940s. Total recorded production up to the end of 1913
was 44,622 tonnes of ore for 40,643 oz Au (at an average grade of 28.33 g/t
Au). The majority of the production came from the South Gippsland leases, some
five leases in total which included the South Gippsland #3 mine and the South
Gippsland mine (also referred to as #4 mine and the Gippsland Deep), which
produced a combined total of 35,415 tonnes for 32,522 oz Au. Other key
producing leases were United (2710 tonnes for 2274 oz Au) and Eclipse (954
tonnes for 754 oz Au).
The Gindalbie Gold Project consists of the granted area contained within
mining lease M27/158, which sits adjacent to the eastern border of the Eclipse
licence area, and extends the exploration targets an additional 2km along the
Eclipse lodes trend, plus a further 1km to the north and 3km to the south
(refer Figure 2). The "granted" area covers 643 ha of highly prospective
ground containing a number of the previously mentioned historic gold mines
located along a series of northwest-southeast striking mineralised trends.
The main trend containing the Eclipse and Jack's Dream deposits aligns with
several of the old workings to the south-east including Golden Puzzle and
Bulletin. The Eclipse trend represents an exploration target of over 4km in
strike length across the two licences M27/153 and M27158.
The Gippsland and United trends run sub-parallel to the Eclipse Trend, some
500m and 1000m respectively to the east. The Gippsland trend contains the
original South Gippsland leases which produced the majority of the gold from
the historic Gindalbie goldfields. Both of these trends extend through the
granted area providing an additional exploration target of over 4km in strike
length.
Finally, there appears to be a fourth sub-parallel trend lying 500m to the
south-west of the Eclipse trend which contains the old Bulletin and Laurel
mines and a recently developed shallow open pit at Bud's Find.
Figure 2. Granted area within ML27/158 showing major mineralised
sub-parallel trends running north-west and south-east
Previous Exploration 1980s - Current
During the period mid-1983 to mid-1985, exploration of the present area was
carried out by BP Minerals Australia Pty Ltd in a Joint Venture with the then
tenement holders (Messrs Tonkin, Tonkin
and Dale). Work carried out included aerial photography, dump sampling, geophysics and RAB (approximately 20,000m) and RC
drilling (approximately 1150m). The majority of this work was conducted
around the South Gippsland/United area of the mining licence, which lies
outside the granted area. This area is currently being worked by Maher Mining
who are redeveloping the old shaft at South Gippsland #4 and looking to build
a small ore treatment facility within this area.
The dump samples collected ranged up to 130g/t Au. RAB drilling at South
Gippsland was on an 80m by 20m spacing, and elsewhere on a 160m by 40m
spacing. All holes were drilled on east‐west lines drilled either to
the east or more commonly west. Many of the RAB holes were drilled parallel
to the dip of the mineralisation as seen in the old workings. Most of the
drillholes failed to
reach relatively fresh bedrock, which was more than 80m vertical depth
in places.
Samples were collected over 2 metre intervals and composited over 8
metres. Zones of interest were re‐sampled over two metres. The assay
procedures used appear by today's standards to be inadequate. The 8m samples
were assayed for gold via a 3-gram charge by the aqua regia/AAS method. The
2m resamples were on a 30-gram charge, also by aqua regia/AAS. The
extremely poor repeatability of some resamples may be in part due to errors
in sample collection but more likely due to the assay procedures.
A reconnaissance IP and resistivity geophysical survey was carried out in the South Gippsland/United
area. Subsequent RC/open hole percussion drilling showed that the
targets generated were attributable to pyritic volcanic rocks.
Several significant intersections were obtained by the RAB drilling. The RC
and open hole drilling was largely ineffectual due to intersecting stopes
etc. The following table lists the better results from the RAB drilling
that was conducted within the South Gippsland/United area of the licence.
Table 1.
Significant RAB Drill Hole Intersections -
BPMA
Hole Northing Easting From (m) To (m) Interval (m) g/t Au
BPB72 14320 10260 0 8 8 3.72
BPB74 14320 10300 8 16 8 8.48
BPB76 14320 10340 72 76 4 7.44
BPB86 14240 10280 48 60 12 9.20
Following the withdrawal of BP in 1986, Messrs Tonkin, Tonkin and Dale
entered into a Joint Venture with Auralia Resources NL from
mid-1986 to late 1987. Work undertaken included geological mapping, dump sampling, reconnaissance
RAB drilling, underground mapping and sampling, and geophysics. A total of
67 samples were taken in the present area of M27/158 mainly from old dumps
but also from a few pits and a stope. The highest gold results were obtained
from South Gippsland being 23.05g/t
Au. RAB drilling was carried out in 1986/87 at South Gippsland, Golden Puzzle, Bulletin, South Gippsland
No 3, and also other targets now outside the current tenement. A total of 61
RAB holes were drilled with a best result of 3 metres at 2.97g/t Au from
the Bulletin prospect.
An underground mapping and sampling programme was carried out in 1987. Old
workings were entered and channel sampled at South Gippsland, United and
South Gippsland No 3 as well as other old workings outside the present
area.
A total of 824 samples were taken, though not all from the current
area. Significant results of higher than 1 g/t Au were obtained from samples
at all the old workings, including 2.8m @ 7.66 g/t Au from South Gippsland,
7.0m @ 4.24 g/t Au from United, and 1.3m @ 16.02 g/t Au from South Gippsland
No 3. The underground sampling outlined some high‐grade ore shoots and
provided information on the structure of the deposits.
An aeromagnetic survey was flown over an area which included the present
M27/158. Flight lines were 150 metres spaced, sample interval 12 metres and
ground clearance 60 metres. The data was never fully interpreted, however a
preliminary examination showed there was a major
linear feature crossing the tenement with a north-westerly strike. This was interpreted as a steep east
dipping fault zone. A number of splays from the fault were also considered to
be present. The known mineralisation did not appear to be
related to this faulting.
The Project changed hands in the late 1980s/early 1990s. The new owners, Cullimore Management
Pty Ltd, entered into a Joint Venture with Mining Corporation of Australia Ltd
("MCA"). MCA initially undertook a shallow soil geochemical survey over the
entire Project area. A total of 1542 samples were collected
which generated anomalies, but at the time these
were considered to be related to contamination from past exploration
and mining activities.
The difficulty in assessing this programme lies in the shallow nature of the
sampling and the presence of large areas of tailings, waste rock and other
disturbance from the past mining activities. Generally, the 10ppb Au contour
defines the anomalies (against a background of
1‐7ppb). Isolated areas within the 10ppb contour range up to more
than 2g/t Au.
An RC drilling programme was carried out at South Gippsland # 3 around the
same time and a RAB programme was undertaken
to test anomalies resulting from previous work. This RC programme
comprised 19 holes for a total of 773 metres with holes being drilled on a 20
metre by 10 metre grid. Declinations were at 60(o) towards a local
grid east. The RAB drilling programme comprised 36 holes for 1,982 metres.
In 1994‐95 further drilling was carried out. A RAB programme of 74 holes
for 3,981 metres was completed, with holes drilled 60(o) east. An
eleven-hole RC programme for 880 metres was carried out to test the Homeward
Bound Prospect, where reconnaissance RAB drilling had located some
highly anomalous values. One hole was drilled at Bulletin. Some significant
RAB and RC intersections from this drilling are listed in the table
below.
Table 2. Significant Drill Hole Intersections - MCA Drilling
Hole Northing Easting From (m) To (m) Interval (m) g/t Au
GDP011 13487 10640 27 32 5 14.46
GDP019 12918 9542 18 21 3 4.79
GDC002 15318 9622 15 16 1 17.10
GDC021 13545 10655 56 57 1 6.18
GDC021 13545 10655 68 70 2 8.91
Cullimore later sold the project to Roper River Gold NL, who incorporated it
into their float in 1997. Roper carried out a programme of ground magnetics
and sampling of the tailings dumps.
More recently the project has had all the previous exploration and mining data
compiled into a digital data base for ease of use. Since acquiring the
mining lease in 2002, Maher Mining has focused mainly on the South Gippsland
#4 and United mines with the objective of bringing these back into production.
A RC drilling programme of 1,100m (32 holes) was completed in the United area
in 2011. The results are shown in Table 3 below. The mineralised zone
remains open at depth and along strike.
Table 3. Significant RC Drilling Results - United Prospect
Hole Northing Easting From (m) To (m) Interval (m) g/t Au
UN/RC05 6644219 381735 38 42 4 4.08
including 41 42 1 9.69
UN/RC07 6644236 381727 32 33 1 4.20
UN/RC12 6644277 381712 35 36 1 1.05
UN/RC13 6644277 381693 68.5 70 1.5 Stope
UN/RC14 6644273 381673 100 102 2 9.31
including 100 101 1 14.50
UN/RC17 6644313 381709 32 33 1 Stope
and 42 43 1 Stope
UN/RC18 6644317 381691 54 55 1 Stope
and 68 69 1 1.14
And 69 70 1 Stope
UN/RC19A 6644321 381671 73 74 1 Stope
UN/RC19A 96 97 1 2.07
and 99 100 1 10.90
and 39 43 4 1.73
UN/RC20 6644338 381688 69 73 4 5.86
including 69 70 1 16.60
UN/RC21 6644357 381709 8 9 1 Stope
Competent Person Statement
The technical information in this report that relates to the Gindalbie Gold
Project has been compiled by Mr Matthew Sullivan, an employee of Great Boulder
Consultants Pty Ltd. Mr Sullivan is a Member of the Australian Institute of
Mining and Metallurgy. Mr Sullivan has been engaged as a consultant by Maher
Mining Contractor's Pty Ltd. Mr Sullivan has sufficient experience that is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the 'Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves'. Mr Sullivan
consents to the inclusion in this release of the matters based on his
information in the form and context in which it appears.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of Regulation (EU) No
596/2014, as incorporated into UK law by the European Union (Withdrawal) Act
2018, until the release of this announcement.
**ENDS**
For further information please visit www.empiremetals.co.uk
(http://www.empiremetals.co.uk) or contact:
Shaun Bunn Empire Metals Ltd Company Tel: 020 7907 9327
Greg Kuenzel Empire Metals Ltd Company Tel: 020 7907 9327
Ewan Leggat S. P. Angel Corporate Finance LLP Nomad & Broker Tel: 020 3470 0470
Adam Cowl S. P. Angel Corporate Finance LLP Nomad & Broker Tel: 020 3470 0470
Damon Heath Shard Capital Partners LLP Joint Broker Tel: 020 7186 9950
Susie Geliher St Brides Partners PR Tel: 020 7236 1177
Ltd
Selina Lovell St Brides Partners PR Tel: 020 7236 1177
Ltd
About Empire Metals Limited
Empire Metals is an AIM-listed (LON: EEE) exploration and resource development company with a project portfolio comprising gold interests in Australia and Austria.
The Company strategy is to develop a pipeline of projects at different stages in the development curve. Its current focus is on the high-grade Eclipse Gold Project in Western Australia, with the goal to expand through the addition of further projects in the region to develop a viable and compelling portfolio of precious metals assets.
Empire also holds a portfolio of three precious metals projects located in an historically high-grade gold production region comprising the Rotgulden, Schonberg and Walchen prospects in central-southern Austria.
The Board continues to evaluate opportunities through which to realise the value of its wider portfolio and reviews further assets which meet the Company's investment criteria.
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