Investors smiled on Metalicity today on news of a farm-in deal over the prolific Kookynie and Yundamindra Gold districts in the Eastern Goldfields, WA.
The farm-in agreement with Nex Metals Explorations will see Metalicity initially spend a minimum $500,000 within 12 months and another $5 million over up to 5 years to earn 51% of the projects.
At that point, NME and MCT will form a co-contributing joint venture to develop the Kookynie and Yundamindra Projects.
“This deal provides us with access to one of the Eastern Goldfields’ last remaining underexplored, significant production centres,” Metalicity CEO, Mat Longworth said.
He said the team had significant experience in this region with over 30 years of combined district experience in successful exploration including the Raleigh and Sunrise Dam mines.
“These projects provide Metalicity with the opportunity to define significant gold resources, building off historic exploration, by employing modern techniques and science,” he said.
Mr Longworth said exploration would begin during May, a fast start due to the experience of Metalicity’s team and the cooperative work undertaken with NEX’s on the ground team.
Through a results-based exploration programme across both projects our goal is to develop a significant resource and reserve base, from which to eventually commence a sustainable mining operation focusing on grade and margin, he said.
“This is a very exciting development, Metalicity’s stated three-part strategy of near-term production assets, the very large Admiral Bay zinc asset through our holding in Kimberley Mining and the extensive early stage land holding the Paterson Province and Fraser Range is coming together.”
Kookynie lies approximately 180 km north of Kalgoorlie, 50 kms south of Leonora and approximately 25 kms from the bitumen Goldfields Highway linking Kalgoorlie to Leonora in the Eastern Goldfields of Western Australia.
The project hosts circa 50,000oz gold of pre-JORC 2012 Mineral Resources with historic production of around 360,000oz of gold.
Importantly, Kookynie has excellent exploration upside in current resources and additional lines of mineralisation and has not been subject to any intense exploration over last 25 years.
Initial work is to drill and extend/ upgrade six current resource targets to JORC 2012 compliancy.
Yundamindra consists of nine granted mining leases, which the Company will hold the rights to explore.
Nex is well advanced in dealing with the plaints affecting these tenements and the Company looks forward to commencing exploration on this Project. The project hosts significant historical production of 74kt @ 19.3 g/t Au for 45,000 ounces.
Shares in Metalicity hit a high today of 0.9c, up 29%, on news of the farm-in.