Strickland Metals has entered into a binding agreement to sell its Millrose gold project to neighbouring global gold miner Northern Star Resources in a deal worth about $61 million.
The deal has netted the company $41 million in cash and 1.5 million fully-paid ordinary Northern Star shares, with a $2 million cash deposit paid on the execution of the agreement.
Strickland picked up the operation in 2021 with an indicated and inferred mineral resource estimate of six million tonnes grading an average 1.8 grams per tonne gold for 346,000 ounces of contained gold. The site is about 40km east of Northern Star’s more than 10-million-ounce Jundee gold operation.
The company will retain its nearby Horsewell, Dusk til Dawn, Yandal East, Baxters and Iroquois projects. It already has plans for a 1500m diamond drill campaign and a 5000m reverse-circulation (RC) drill program at Horsewell.
In October, management announced it was looking to pursue a demerger of its Iroquois zinc-lead project. However, due to the latest agreement with Northern Star, it has decided to put the demerger on hold and will investigate potential exploration programs at the operation.
Strickland Metals chief executive officer Andrew Bray said: “We are very pleased to deliver such a transformative sale for shareholders in a relatively short period of time. The Millrose Project was purchased for $10 million in mid-2021. After a highly successful 11-month drilling campaign throughout 2022 costing approximately $16 million, we are now selling the project for approximately $61 million, generating an approximate $35 million profit for the Company.”
Earlier this year, the company identified a new structure at Millrose, highlighting the possibility of a secondary high-grade deposit after receiving final assays from its 2022 drill campaign. It says the Millrose West structure, about 200m west of the main Millrose deposit, is open to the north and south and is traceable using geophysics data in an area of about 5km.
Assay highlights from Millrose West show a 19m intercept going 2.9g/t per tonne gold from 76m, including 5m at a significant grade of 8.7g/t gold from 89m. A second hole recorded 13m grading 2.1g/t gold from 83m.
In addition to the discovery at Millrose West, Strickland has continued to return positive results from its drill campaign across its greater Millrose project. Significant assays from Millrose Central recorded 32m going 1.8g/t gold from 66m, including 14m at 3g/t from 79m. The explorer also received a wider 40m hit grading 1.1g/t from 87m, including 6m at 3.8g/t from 94m.
Peak assays from drilling at Millrose North highlighted a 5m intercept going 8g/t gold from 101m and 6m reading 6.4g/t from 56m, in addition to 6.4m at 3.1g/t from 64.6m.
Now with a significant addition to Strickland’s coffers, the market will be keen to see what the company can uncover next as it looks to expand its exploration programs at its remaining projects.
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By Michael Philipps
