- Option to purchase 4 prospecting licenses over the Transfind Extended project from two Kalgoorlie based prospectors.
- High grade surface rock chips have been returned by the prospectors (up to 78.7g/t Au) and Southern Gold (up to 50.4g/t Au).
- Mineralisation interpreted to be the south-westerly extension of the small historic Transfind open pit.
- Project is proximal to nearby haul road system with relatively easy access to 2 mills (Jubilee and Randalls).
Very High Grade Gold in Sampling
Southern Gold has executed a binding term sheet with two Kalgoorlie based prospectors over four prospecting licenses (Table 2) approximately 70km east of Kalgoorlie (Figure 1 and Figure 2) at the Transfind Extended project.
The prospectors have been working on the project area around the historic Transfind open pit mine, returning high grade gold in surface samples (up to 78.7g/t Au), finding very coarse gold in quartz as mineral specimens suitable for sale and recovering coarse gold through panning or trommeling (Photos 1, 2 and 3).
Preliminary due diligence field work by Southern Gold has also returned high grade gold in surface samples (up to 50.4g/t Au, Table 1) with some samples displaying small (1mm) pieces of visible gold in oxidized quartz vein material. Work by previous explorers, including shallow drilling and soil sampling, indicates several mineralised trends south of the Transfind open pit (Figure 3). Transfind was a small open pit where 31kt of ore @ 4.9g/t Au (~5koz Au) was mined during early 2000.
Southern Gold Ltd’s Managing Director, Mr Simon Mitchell: “The Transfind Extended project ticks a lot of boxes – high grade gold indications, ‘nearology’ to an old open pit and proximity to infrastructure, including 2 mills. We have structured the deal to keep upfront costs to a minimum while putting dollars into the ground in the form of drilling and the ultimate acquisition cost is only triggered should we see a project development scenario with cash flow at the back end. It’s an exciting project where the prospectors have done some good ground work worthy of follow up.”
On execution of the binding term sheet, Southern Gold paid $50,000 cash to the two prospectors ($25,000 each) to secure a two year option to purchase the prospecting licenses listed below (Table 2). The two year exploration period commences on 1 February 2017 and ends on 31 January 2019 during which time Southern Gold must conduct a minimum of 2,000m of RC or diamond drilling and keep the prospecting licenses in good standing (Table 2) in order to exercise the purchase option.
Should Southern Gold elect to exercise its purchase option it must:
- Pay $200,000 to the prospectors ($100,000 each); and
- Execute a royalty agreement with the prospectors whereby they are entitled to a $1.80/t of ore royalty for all production from the tenements.
The consideration above is to be paid within 20 business days of the transfer of the tenements to Southern Gold’s name and Ministerial approval of the transfer.