Following ongoing success across its reinvigorated gold and rare earths-focused portfolio, Meeka Metals has offloaded its Gecko North project in WA to private explorer LithGold Minerals. The deal will see the company pocket $130,000 now, $100,000 in February and claim a slice of the operation’s future riches thanks to a 1.5 per cent net smelter royalty.
Funds are likely to end up in the exploration kitty for some of Meeka’s existing projects.
Meeka is already sitting on a 1.1-million-ounce resource at Murchison and is now looking to capitalise on the ground’s potential at depth. The project is strategically positioned along a major highway and is neighbouring a 1.8 million tonne per annum gold mill.
Late last year, the company delivered a compelling set of figures from a scoping study evaluating gold production at its wholly owned Murchison project. Some of the highlights of the review include the company earning $457m a year over the operation’s 8-year mine life and an undiscounted cash flow of $182m.
According to the study, the project could achieve a total mine production output figure of 4.9 million tonnes at 2.8 grams per tonne ground for 443,000 ounces of the precious yellow metal.
The review took in underground mining at the project’s Andy Well prospect, along with open pit and underground mining at the nearby Turnberry target.
Meeka has so far defined a 1.8 million tonne resource at Andy Well running a cool 8.6 g/t gold for over half a million ounces, whilst Turnberry houses an 11.3 million tonne resource going 1.7 g/t for 610,000 ounces of gold.
Recent work at Murchison has seen the miner strike shallow, high-grade gold at the St Anne’s prospect, immediately south of Turnberry.
The company is now working towards a prefeasibility study at Murchison along with establishing a mineral resource at St Anne’s.
Meeka could also plough some of its new capital into its rare earths plays in the Albany-Fraser belt near Esperance.
The company’s Cascade and Circle Valley operations occupy a dominant 2290 square kilometre land position along WA’s west coast. Work at the projects has so far turned up a suite of thick, high-grade rare earths mineralisation including 12m at 715 parts per million total rare earth oxides, or “TREO” from just 8m at Circle Valley in enriched saprolitic clays.
Management says the mineralisation at Cascade is something of a step change in terms of both scale and grade, with the project area potentially hosting a raft of large-scale rare earths deposits.
Notable strikes from Cascade include 16m at 2223ppm TREO from a shallow depth of 44m.
According to the company, assays from both ventures also house significant proportions of valuable magnet rare earths — up to 45 per cent of the total grade in some cases. The proportions could prove hugely lucrative for the project’s feasibility, with management earmarking the inclusions as a critical factor in the deposit’s economics.
Meeka Metals’ Managing Director, Tim Davidson said: “We continually evaluate our portfolio of high quality projects to ensure capital is allocated where it will deliver most value. Where there is an opportunity to monetise non-core assets at fair value, and refocus capital on higher value outcomes, we will act on those opportunities.”
“With material results being delivered from our ongoing work in the Murchison, successful gold drilling in the Albany-Fraser and the emerging opportunity in rare earths, Gecko North no longer fit into our portfolio.”
With the sale of a non-core asset under its belt, Meeka looks to be transforming itself into a lean operation focused on developing its high-grade gold and rare earths assets in WA.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
