Cove to acquire Alcoyne projects
THE BOURSE WHISPERER: Recently ASX-listed Cove Resources has entered into an agreement to acquire 100% of the Tally Ho and Mt Scott projects from Alcyone Resources.
Tally Ho is located approximately 50 kilometres southwest of Mackay on the central Queensland coast and just seven kilometres from the Peak Downs Highway, which heads to the port of Mackay.
Cove said the acquisition of the Tally Ho and Mt Scott projects provides it with exposure to silver, which it described as a commodity that complements gold as a strategic investment alternative.
“The Tally Ho project represents both an opportunity to expand the existing inferred resource and evaluate new targets in an under-explored large mineralised corridor,” Cove Resources said in its ASX announcement.
“The project has immediate drilling targets to test for possible extensions of the existing resource and other prospects identified through rock chip sampling.”
The Tally Ho Project has an historic Inferred Resource Estimate of 733,000 tonnes at 49 grams per tonne silver, 0.1% copper, 0.09% lead and 0.83% zinc, using a 40g/t silver equivalent cut-off-grade.
This Resource Estimate was reported to the ASX by Alcoyne Resources’ previous incarnation Macmin Silver in 2008 based on metal prices at July that year.
So far Cove has not been able to independently verify the previously published resource figures.
The company has proposed a drilling program for the Tally Ho project with a view to updating the resource using current metal prices and collecting technical data to potentially increase the size and upgrade the resource category.
Cove said that it anticipates drilling will commence once all approvals have been received and a suitable rig sourced.
The acquisition cost will be:
– The issue of shares to Alcyone Resources to the value of $ 50,000 based on the 30 day VWAP of Cove shares prior to the ASX announcement of the Agreement and payable on execution of the agreement.
– The issue of shares to Alcyone Resources to the value of $150,000, based on the 30 day VWAP of Cove shares prior to the ASX announcement of the extension, upon the extension of the Tally Ho tenements for a period of not less than one year.
– Upon securing the extension Cove Resources will take over all current and ongoing environmental liabilities relating to the tenements up to an amount of $78,000.
– The acquisition is subject to approval by the Minister of Queensland Department of Employment, Economic Development and Innovation, for the transfer of the tenements.