THE BOURSE WHISPERER: Sovereign Gold (ASX: SOC) has made an offer for the full acquisition of unlisted company Gossan Hill Gold.
The attraction for Sovereign Gold is Gossan Hill’s numerous gold prospects located in New South Wales
“The acquisition of Gossan Hill provides multiple benefits for the company, including an expanded exploration footprint in New South Wales with an additional three quality project areas within eight Exploration Licences,” Sovereign Gold said in its ASX announcement.
“Previous exploration has indicated significant resource upside at the Gossan Hill properties and in particular, the Hobbs deposit should enable Sovereign Gold to rapidly deliver resource growth and leverage off its experience exploring for IRGS in New South Wales.”
Gossan Hill project areas. Source: Company announcement
Sovereign gold explained the Gossan Hill prospects are all in New South Wales, centred on known gold occurrences, some with historic production.
The prospects contain more than 20 individual quality targets the company intends testing.
The Mt Adrah prospect is considered to belong in the intrusion-related gold deposit category.
It lies on the Gilmore Suture, north west of the old gold mining centre of Adelong.
Mineralisation in the deposit is open at depth below 315m, and there are a number of near-by prospects yet to be tested by drilling for additional mineralisation of this type.
The Bauloora prospect is an untested low-sulphidation epithermal gold mineralised system near Cootamundra.
Sovereign indicated drilling and detailed geological mapping has already been planned to test this prospect.
The Peel Fault is situated east of Barraba in the New England district, where Gossan Hill recently claimed discovery of near-surface gold mineralisation in altered rocks in and adjacent to the fault zone, prospective for orogenic and intrusion-related gold mineralisation along the fault and covered by an extensive tenement holding.
The terms of the Agreement are:
– Consideration for the acquisition to total up to $700,000, comprising $200,000 in cash and the issue of 2 million ordinary shares in Sovereign Gold at 25 cents per share;
– Due diligence to Sovereign Gold’s satisfaction including but not limited to technical, legal, accounting and title matters;
– Acquisition of 80 per cent of the shares of Gossan Hill by Sovereign Gold; and
– 80 per cent of the Sovereign Gold shares acquired by Gossan Hill shareholders will be subject to voluntary escrow for a period of 12 months.