ASX listed Terrain Minerals is set to offload its Great Western Gold Project near Leonora to ASX-listed Red5 under an option agreement that includes a $300,000 non-refundable, upfront fee and $2.2 million worth of Red5 scrip.
Terrain’s Great Western gold project is situated on a granted mining lease containing a mineral resource of 709,000 tonnes grading a solid 2.72g/t gold for just under 63,000 ounces.
Terrain will retain the highly prospective Wild Viper prospect area, which fully envelopes the Great Western project.
Earlier this year, the company tripped over a high-grade grab sample grading 4.67g/t gold at Wild Viper along the prospective “382” shear zone that is interpreted over more than 2.5km of strike.
A field program shortly followed with shallow trenching, geological mapping and surface sampling to define potential drill targets along the shear. Results from this exploration program peaked at 6.19g/t gold in one sample, located approximately 80m from the high grade grab sample.
Under the terms of the Great Western Sale option agreement, Red5will conduct due diligence in the form of drilling into the existing resource.
If the sale goes through, Terrrain will be cashed up and dangerous and will have a war chest to source new projects in addition to developing its remaining Wild Viper project in the area and it's Red Mulga base metals project near Geraldton.
Maiden drilling results at Red Mulga were encouraging with a peak number of 5m grading 0.15% nickel and 0.35% chromium from 33m down-hole.
The maiden drilling at Red Mulga also turned up elevated levels of copper to 0.74%, 0.02% zinc and 0.06g/t gold from 87m down-hole. According to Terrain, the drilling program provided the first indication of actual mineralisation in a region that has lacked any serious modern exploration.
The deal on Great Western looks to be a win-win for both Terrain and Red5 shareholders with Terrain maintaining exposure in the area courtesy of Wild Viper and Red5’s nearby producing King of the Hill gold operation potentially providing some synergies for Red5 and maybe even Terrain if it can prove up something at Wild Viper.
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By Matt Birney
