THE DRILL SERGEANT: Musgrave Minerals (ASX: MGV) gained a great leap forward for the company’s Cue project in the Murchison district of Western Australia.
Musgrave Minerals has signed a non-binding Term Sheet with Westgold Resources (ASX: WGX) providing a near term development pathway for the existing gold resources at Musgrave’s Cue project.
The Term Sheet outlines the terms of a Mine Management and Profit Sharing arrangement, under which Musgrave can receive 50 per cent of profits from operations that would be financed, managed and operated by Westgold.
Musgrave explained the Term Sheet is non-binding and provides the scope on which a formal Mine Management and Profit Sharing Agreement can be negotiated.
The arrangement would be restricted to the existing JORC-compliant gold resources Musgrave has already established at the Lena, Break of Day, Jasper Queen, Gilt Edge and Rapier South deposits on its 100 per cent-owned tenements at Cue.
Musgrave would retain 100 per cent of the exploration interests and upside outside of the defined resources.
“This outcome reduces the technical and capital risk for Musgrave and provides the potential for a near term development option for the company,” Musgrave Minerals managing director Rob Waugh said in the company’s announcement to the Australian Securities Exchange.
“We welcome the opportunity to partner with Westgold, an experienced gold mining company with strong technical capabilities, equipment and operating mills in the region.
“Musgrave would retain a 100 per cent interest in all the exploration upside and the potential development is expected to generate positive cashflow that can be utilised to fund exploration, resource growth and discovery for the benefit of Musgrave shareholders.
“The relationship would also enable Musgrave to focus on its exploration strengths and accelerate our drilling programs across a range of high-grade targets including Lake Austin North.”