Musgrave Minerals Making Loud Drillbit Statements

THE INSIDE STORY: Musgrave Minerals (ASX: MGV) has been shouting loud and proud as it progresses its Cue gold project in the Murchison region of Western Australia.

Musgrave Minerals has released a steady stream of positive news announcements from its 100 per cent-owned tenure at the Cue project, which consists of the Moyagee gold and Hollandaire copper resources.

The Cue project hosts a combined JORC (2012) and JORC (2004) compliant total Mineral Resource base of 4.83 million tonnes at 2.84 grams per tonne gold for 440,000 ounces contained gold across multiple deposits.

The Hollandaire copper project hosts a JORC (2004) compliant total Mineral Resource base of 2 million tonnes at 1.9 per cent copper for 38,800 tonnes of contained copper, 2.7 million tonnes at 5.8g/t silver for approximately 495,000 ounces contained silver, and 0.52 million tonnes at 1.35g/t gold for 22,500 ounces contained gold. Hollandaire also hosts a JORC (2004) compliant total Ore Reserve of 442,000 tonnes at 3.3 per cent copper for 14,600 tonnes of contained copper, 574,000 tonnes at 8.2g/t silver for approximately 151,000 ounces contained silver.

Work carried out by Musgrave has enabled it to define a 20-kilometre-long prospective gold corridor that hosts the Break of Day and Lena gold resources.

Break of Day hosts 868,000 tonnes at 7.15 grams per tonne gold for 199,000 ounces of gold.

The Lena deposit currently boasts 2.68 million tonnes at 1.77g/t gold for 153,000 ounces of gold.

Musgrave intent is to develop a low-cost operation from the current resource base, capable of delivering strong financial returns.

The idea is to largely self-fund exploration at high priority targets to locate large gold systems capable of delivering significant resource increases, that could in the future, support a stand-alone operation.

The latest news – at the time of writing – to emanate from Cue was drilling progress at the Lake Austin North prospect.

This drilling program consists of approximately 30 RC drill holes for 7,500m and is being undertaken to test down dip of previously reported regolith gold mineralisation the company intersected whilst carrying out a round of aircore drilling.

The Lake Austin North prospect is located three kilometres north of the Break of Day gold deposit at the Cue project and is the latest in a series of targets to return compelling drilling results.

Musgrave Minerals recently reported assay results from the first two reverse circulation (RC) basement drill holes into the A Zone target at the Lake Austin North prospect.

Drill hole 18MORC039 intersected an impressive:

42 metres at 3.2 grams per tonne gold from 108m downhole, including 24m at 5.1g/t gold from 114m, including a higher-grade core of 6m at 12.6g/t gold from 126m.

Musgrave explained the initial sampling was undertaken using six metre composites with the above intersections encountered within a broad gold halo of lower-grade gold mineralisation of 84m at 1.7g/t gold from 84m depth.

Drill hole 18MORC040, collared 75m west of 18MORC039 intersected a thick broad regolith gold halo assaying:

60 metres at 0.14g/t gold from 72m downhole and terminated in low-grade gold mineralisation (18m at 0.14g/t gold from 222m downhole to EOH).

This was situated close to the depth projection of the high-grade gold lode intersected in 18MORC039.

Drill hole 18MORC040 terminated in mineralisation at the depth capability of the rig and Musgrave noted that a diamond tail would be completed to test the downward extent of this high-grade zone.

Drill holes 18MORC039 and 18MORC040 are the first holes Musgrave has drilled into the fresh basement below the A Zone target, which is open to the north, south and down dip.

“This great result demonstrated the potential for the A Zone target to host thick, high-grade gold mineralisation,” Musgrave Minerals managing director Rob Waugh said.

“The extent of the basement gold mineralisation is not yet defined and remains completely open along strike and down dip.”

“The result supports Musgrave’s view that Lake Austin North has the potential to be a large, well-mineralised gold system and potentially a new gold discovery for the company.”

“The aircore regolith gold halo at Lake Austin North is extensive and we are looking forward to drilling more holes and receiving further assays.”

The Lake Austin results followed the intersection of shallow gold mineralisation at the Numbers prospect.

Infill drilling at the Numbers prospect intersected further high-grade gold within sedimentary iron formation below thin hardpan cover.

This infill drilling has helped to enhance the geological confidence in the current JORC 2004 Inferred Resource of 278,000 tonnes at 2.5g/t gold for 22,000 ounces and will aid the focus of additional follow-up drilling at depth and along strike.

Best results included:

11m at 2.45g/t gold from 28m downhole, including 6m at 4.05g/t gold from 29m;

12m at 2.09g/t gold from 54m downhole, including 1m at 7.65g/t gold from 54m and 5m at 3.03g/t gold from 61m; and

Preceding the Numbers results, the first drill hole drilled into the Joshua gold target, approximately 4.7km south of Break of Day, intersected:

6 metres at 3.9g/t gold from 54m downhole.

New gold mineralisation has been identified at multiple targets and the company believes the program highlights the potential of the Cue project to host further gold deposits within what it considers to be a very prospective and well-endowed region.

On the corporate front, Musgrave welcomed Westgold Resources (ASX: WGX) to its share register with the latter subscribing for 48 million Musgrave shares.

The Westgold investment provided not only a healthy financial boost, it also provided validation for the Cue project and the work Musgrave has completed to date and is intending to complete in the future.

At a price of seven cents per share, Westgold’s investment came in at $3.36 million and was at the time at a 15.4 per cent premium to Musgrave’s 15-day VWAP.

The investment handed Westgold a 14.7 per cent stake in Musgrave Minerals.

Subsequently, the two entities executed a non-binding Term Sheet providing a near-term development pathway for existing Cue project gold resources.

The Term Sheet outlines the scope of a Mine Management and Profit Sharing arrangement, under which Musgrave will receive 50 per cent of profits from operations to be financed, managed and operated by Westgold.

The arrangement is restricted to existing JORC-compliant gold resources, and a 100m buffer at the Lena, Break of Day, Jasper Queen, Gilt Edge and Rapier South deposits on Musgrave’s 100 per cent-owned Cue tenements.

Musgrave retains 100 per cent exploration interests including Lake Austin North and any upside to emerge from outside of the defined resources.

The proposed arrangement provides Musgrave with an option to potentially fast-track development at the Cue project by reducing development and capital risk exposure.

Musgrave will be working alongside Westgold’s experienced technical team, benefitting from its experience in planning, permitting and optimisation in both toll-treatment and mine development of gold deposits in WA.

The potential arrangement would enable Musgrave to focus on its areas of expertise, those being exploration and discovery while affording it the opportunity to generate near-term cash.

The potential also exists for funding to progress future exploration and drilling programs to make further discoveries and continue to grow the resource base.

Musgrave believes significant potential exists to extend existing mineralisation and discover new mineralisation within the project area.

Results to date say it may very well be right.


Musgrave Minerals Ltd (ASX: MGV)
…The Short Story

Ground Floor
5 Ord Street
West Perth WA 6005

Ph: +61 8 9324 1061


Graham Ascough, Rob Waugh, Kelly Ross, John Percival