Doray acquires Gnaweeda project

THE BOURSE WHISPERER: Doray Minerals (ASX: DRM) has reached an agreement with Archean Star Resources Australia, a subsidiary of TSX-V-listed Transatlantic Mining Corporation.

The deal will result in Doray purchasing a majority interest in the Gnaweeda gold project, located in the Northern Murchison region of Western Australia.

The Gnaweeda tenements are located approximately 10 kilometres south-east of Doray’s high-grade Andy Well Gold Mine, which is currently in production.


Location and geology of the Gnaweeda gold project in relation to the
Andy Well gold project and other Doray exploration projects. Source:
Company announcement


Doray described Gnaweeda to be an advanced, high-grade exploration project with existing walk-up drill targets based on previously identified high-grade gold mineralisation.

The project tenements cover almost the entire Gnaweeda greenstone belt, the next greenstone belt east of the Meekatharra belt.

“A bit like Andy Well, Gnaweeda has been relatively under-explored despite some pretty exciting historical drill results,” Doray Minerals managing director Allan Kelly said in the company’s announcement to the Australian Securities Exchange.

“The game changer for Gnaweeda will be the ability to leverage off the existing mining and processing infrastructure at Andy Well.

“Doray believes that with systematic exploration, the project could provide additional high-grade ore sources for Andy Well in the near future.”

Doray explained the project tenements are subject to a series of existing Joint Venture Agreements between Archean Star, Teck Cominco Australia and Chalice Gold Mines.

The upshot of all that is Archean Star has earned 100 per cent of Teck’s interest in the project, being an 88 per cent interest in the two main tenements (Chalice 12 per cent) and a 100 per cent interest in the remainder.

Teck retains a clawback right to 75 per cent of the project in the event of the delineation of a JORC-compliant Resource in excess of one million ounces of contained gold, or, should Teck not elect to clawback, a 10 per cent Net Profit Interest.

In consideration for Archean Star’s interest in the project tenements, Doray will make a $500,000 cash payment to the Canadian company.

A further $500,000 payment will be payable to Archean Star upon the declaration of a JORC-compliant Mineral Resource in excess of 150,000 ounces of contained gold at Gnaweeda.

Milestone payments, each of $250,000, will be payable upon production increments of 50,000 ounces from the project, to a maximum of $1 million.

The Agreement remains conditional upon satisfaction of several items, including the waiving of an existing third-party first right of refusal.