Mithril Resources acquires new WA gold project

THE BOURSE WHISPERER: Mithril Resources (ASX: MTH) has signed a Farm-in and Joint Venture Letter Agreement with KalNorth Gold Mines (ASX: KGM).

The deal will result in Mithril earning up to an 80 per cent interest – by completing expenditure of $2 million over 4 years – in the Spargoville gold project, which is located immediately adjacent to the company’s Spargos Reward gold project near Kambalda in the Eastern Goldfields of Western Australia.


Spargoville location plan showing Mithril’s 100 per cent–owned
Spargos Reward gold project (green) and KalNorth’s Spargoville gold
project (red). Source: Company announcement


Mithril recently commenced a 1,300 metre RC drill program to test the extensional potential of the Spargos Reward gold mine at the Spargos Reward gold project with results expected by late January 2013.

Mithril explained the Spargoville gold project is located on the Kunanalling Shear, a regional shear zone that hosts significant gold mineralisation, including  Ramelius Resources’ (ASX: RMS) operating Wattle Dam gold mine (total production of 250,000 ounces gold), and Spargos Reward (total production of 30,000 ounces of gold at 8 grams per tonne from during the 1940’s and early 1980’s).

Mithril considers Spargoville to contain a number of walk-up drill targets, which the company believes offer excellent exploration upside.

These include the Lady Allison gold deposit where a JORC Code-compliant Inferred Resource of 2.1 million tonnes at 1.3g/t gold (86,800ozs) was estimated by KalNorth Gold in late 2011.

The acquisition of Spargoville, in conjunction with Spargos Reward gold project, increases Mithril’s landholding within the area to approximately 75square kilometres, which it claims consolidates its position within the Eastern Goldfields of Western Australia.

“The Spargoville acquisition is significant for a number of reasons,” Mithril Resources managing director David Hutton said in the company’s announcement to the Australian Securities Exchange.

“Not only does it give Mithril access to a number of exciting exploration targets immediately adjacent to our Spargos Reward gold project, the transaction sees the start of a longer term strategic relationship with KalNorth Gold Mines, a rapidly emerging Perth – based gold mining company.

“We see considerable exploration upside at Spargoville and look forward to commencing exploration activities early in the March Quarter next year.”