- Carnavale Resources (CAV) has signed a two-year binding option agreement with Western Resources to acquire 80 per cent of the Ora Banda South Project in WA
- Under the acquisition, Carnavale will pay up to $225,000 and issue up to 25 million shares
- It will also be required to conduct exploration or drilling across various areas before April 2021 and June 2022
- While the Ora Banda South Project has seen limited exploration, two major gold anomalies occur in the southern portion, which the company will follow up on
- The project also lies within 15 kilometres of significant historic gold mines, including Ora Banda and Mt Pleasant
- Carnavale ended the day with no change, with shares closing flat at 1.1 cents
Carnavale Resources (CAV) has signed a two-year binding option agreement with Western Resources to acquire 80 per cent of the Ora Banda South Project.
Under the acquisition, Carnavale will pay Western Resources $75,000 in cash to cover the option fee. It will also issue 10 million ordinary company shares.
The company must also conduct either a surface geochemical program or drilling program on P16/3000 and P16/3001 before April 2021 and either a surface geochemical program or drilling program on P16/3077, P16/3081 and P16/3082 before June 2022.
Upon exercising the option, Carnavale must pay Western Resources another $150,000 and issue 15 million ordinary shares. Western Resources will retain the remaining 20 per cent of the project and be free carried to a bankable feasibility study (BFS).
Once the BFS has been completed, Western Resources will need to contribute to the ongoing costs on a pro-rata basis or be diluted. Alternatively, it can choose to convert its 20 per cent equity interest to a 1.5 per cent net smelter royalty.
The Ora Banda South Project covers a 25-square kilometre area and is located 65 kilometres northwest of Kalgoorlie in the Yilgarn Craton of Western Australia.
It makes up 15 kilometres of strike along the Kurrawang Conglomerate and Black Flag Group contact defining the Carnage Shear Zone.
The project area is situated less within 15 kilometres from significant historic mines including Ora Banda, Siberia, Bullant, Mt Pleasant, Cashmans and Lady Bountiful that have produced over six million ounces.
“Carnavale is delighted to acquire this option to explore the Ora Banda South Project. Our geological team interpret the area to be underexplored and highly prospective with a geological setting similar to the St Ives Invincible deposit, which hosts over two million ounces of gold,” Executive Chairman Ron Gajewski said.
Pleasingly, four-kilometre and 1.2-kilometre-long auger gold anomalies occur along the Carnage Shear Zone in the southern portion of the tenement package with the remaining strike still to be tested.
While exploration has been limited, previous drilling has yielded five metres at 2.29g/t gold from 116 metres and eight metres at 2.58g/t gold from 32 metres.
Carnavale plans to conduct modern exploration work, including soil sampling and geophysical aeromagnetic surveys, as well as shallow aircore drilling to target and extend bedrock gold mineralisation in the southern tenement target areas.
Carnavale ended the day with no change, with shares closing flat at 1.1 cents.