THE BOURSE WHISPERER: Musgrave Minerals (ASX: MGV) has struck up a new friendship in the form of an Earn-in and Exploration Joint Venture Agreement with Evolution Mining (ASX: EVN).
The deal covers the Lake Austin portion of Musgrave’s Cue project in the Murchison District of Western Australia.
Under the terms of the agreement, Evolution will subscribe for approximately 18.6 million ordinary shares in Musgrave through a share placement at a price of 8.07 cents per share to raise $1.5 million, after which Musgrave will boast a bank balance of around $4.2 million.
Funds will be used to advance drilling at Mainland, Lena and Break of Day.
Musgrave will retain its interest in areas hosting known gold resources, including Break of Day and Lena, and the Mainland area.
Evolution can earn 75 per cent in the JV area by sole funding $18 million over five years with a minimum expenditure of $4 million to be completed in the first two years.
If Evolution does not spend the entire $18 million within five years, Musgrave will retain 100 per cent ownership.
Musgrave will be manager during the minimum expenditure period of the agreement.
“We are very pleased to partner with Evolution, one of the largest gold producers on the ASX and a highly regarded explorer,” Musgrave Minerals managing director Rob Waugh said in the company’s announcement to the Australian Securities Exchange.
“The JV will fast track exploration and we look forward to leveraging Evolution’s extensive technical knowledge and financial resources with our in-house expertise to accelerate potential gold discoveries at Cue.
“This is a positive result for Musgrave and a strong endorsement of the company’s projects and upside exploration potential.
“Musgrave will retain its interest in all areas hosting existing gold resources including Break of Day and Lena along with the Mainland option area which totals 172 square kilometres of exploration tenure.
“We welcome Evolution to the share register and the additional funding will support Musgrave’s drilling and discovery efforts on the 100 per cent retained ground.”
Musgrave has commenced an RC/diamond drilling program at Lena with further results expected in late-September.
The aim of the program is to focus on the high-grade shoots and extend the resource with follow-up RC drilling of recent high-grade gold results at Mainland and aircore drilling of new undercover targets planned for later this year.
Musgrave and Evolution will work towards commencing a new drilling program at Lake Austin North and other lake targets where there is evidence of a potential large gold system.
Further drilling at Break of Day to extend and grow the existing resource is being planned.
Development studies on the Break of Day and Lena gold deposits to evaluate options to optimise cash flow and maximise shareholder returns are ongoing.