Mt Gilmore, NSW
On 16 June 2016, Corazon announced it had secured the right to earn up to 80% of the Mount Gilmore Cobalt-Copper-Gold Project (Project) from private company Providence Gold and Minerals Pty Ltd (ASX announcement: CZN Project Acquisition (16 06 16).
The Project is located only 35km from the major centre of Grafton in north-eastern New South Wales (Figure 1). Project tenure includes one granted Exploration Licence (EL8379 – one year old), covering an area of approximately 25km by 15km.
Figure 1: Project location
Mount Gilmore Copper-Gold Potential
The Project is located in the New England Orogen, a significant mineral province in Eastern Australia with a gold endowment of more the 35M ounces and the potential to host large copper-gold systems.
This region hosts deposits such as the Mount Morgan Cu-Au Mine (+50Mt @ 5.9 g/t Au and 0.7% Cu) and Mt Rawdon Gold Mine (50Mt @ 0.71 g/t Au).
A prospective 18km trend (the Mt Gilmore Trend – Figure 2) has been identified within the Project. This zone includes:
- More than 25 historic copper, gold, cobalt and iron workings, including significant shafts, adits and drives with high-grade copper and gold mineralisation (rock chips up to grades of 26.8%Cu and 9.2 g/t Au)
- Five large scale Cu-Au targets have been defined (Figure 2).
Although mapping has identified extensive hydrothermal alteration and copper-gold mineralisation at surface, very little modern exploration has been undertaken. Aside from small-scale historic copper-gold and iron mines, previous exploration has predominantly been restricted to general prospecting/ mapping, rock-chip/ grab sampling, with drilling completed at only one of the targets (the Pulganbar – Cobalt Ridge area).
Figure 2: Mt Gilmore Co-Cu Trend
Background to Mr Gilmore drill program
Corazon’s maiden drill program at Mt Gilmore has been designed to confirm the continuity, position and extent of the cobalt-copper-gold mineralisation within the Cobalt Ridge prospect area, which has been identified by previous drilling. Corazon’s drilling has validated historical mining and exploration results and has confirmed the presence of multiple zones of sulphide mineralisation over a strike length of at least 300 metres. The mineralisation remains open along strike and at depth.
In total, 18 reverse circulation (RC) drill holes were completed for 2086 metres. Results received to date include 300 assays from a total of 1566 samples submitted to date. The assays are from drill holes MGRC001 to MGRC004. Holes MGRC002 and MGRC003 were completed. Holes MGRC001 and MGRC004 have partial assays returned and are currently being extended with core drilling to intersect the interpreted main cobalt lode.
Geological assessment of the mineralisation has been encouraging, with multiple phases of brecciation and sulphide mineralisation interpreted. To enhance the understanding of the Cobalt Ridge system, core drilling has commenced. This drilling is designed to provide additional information for interpretation and modelling of the mineralisation, as well as provide sample material for petrological and metallurgical test work.
Core drilling at Cobalt Ridge is expected to be completed over the next two weeks. As with previous drilling, it is anticipated that this drilling will intersect visible signs of mineralisation. The tenor of the cobalt-copper-gold mineralisation will be determined by laboratory analysis, which is expected to take an additional three to four weeks.
The Purchase Agreement
Under the terms of the agreement with Providence and subject to Corazon completing due diligence to its sole satisfaction on or before 30 June 2016, Corazon has the exclusive right to earn up to an 80% interest in the Project as follows:
- Corazon can earn an initial 51% interest by:
- Issuing Providence 25 million Corazon Mining Limited shares
- Paying cash reimbursements of costs totalling $100,000
- Spending $200,000 on exploration within the first 12 months from the date of satisfaction of all conditions precedent (“Commencement Date).
- Corazon can earn a further 29% interest (totalling 80%) by:
- Completing $2M in exploration within 3 years of the Commencement Date
- Paying $150,000 in cash or shares upon the earlier of the commencement of the third year and Corazon spending a minimum of $500,000 on exploration
- Paying $250,000 in cash or shares upon earning 80% equity in the Project.
- Corazon has the opportunity to extend this earn-in period by one year by paying $50,000 in cash or shares.
- Upon the Company earning 80% equity in the Project, Providence will be free carried until a decision to mine is made.
- Once a decision to mine is made Providence will then have the opportunity to contribute to expenditure requirements according to its working interest, or dilute to a net smelter royalty of 2.0%. Corazon has the right to purchase 1% of the royalty for $3M at any stage.