- Image Resources (IMA) has entered a farm-in agreement to earn up to 80 per cent of the King gold prospect in Western Australia
- Image generally focuses on mineral sands, however, due to the current gold price and the King prospect’s potential, the company is focusing on gold exploration
- The King prospect is located near two of Image’s tenements — one of which is connected to King through a one-kilometre-long supergene zone
- To earn a 40 per cent interest, Image will spend $330,000 on exploration within 24 months
- The remaining 40 per cent stake can be earned by paying the undisclosed prospect owners $240,000 in cash within 180 days of earning the initial 40 per cent interest
- Image will conduct a 42-hole reverse circulation drilling program that will initially target the thick supergene zone
- Image is up 6.25 per cent and shares are trading at 17 cents
Image Resources (IMA) has entered a farm-in agreement to earn up to 80 per cent of the King gold prospect in Western Australia.
The King gold prospect covers 3.7 square kilometres and is completely surrounded by Image’s Erayinia gold tenement and lies south of Image’s Madoonia Downs tenement.
The farm-in expands Image’s target exploration area to 120 square kilometres and provides it with a low-risk, low-cost entry into a brownfield project.
There’s also an opportunity to explore an interpreted thick supergene zone that extends from King into Erayinia.
The supergene zone appears to extend for up to one kilometre and has returned a thickest intersection of 71 metres at 1.03g/t gold from 36 metres.
Other notable intersections include 29 metres at 1.12g/t gold from 64 metres, 43 metres at 0.72g/t gold from 36 metres and 17 metres at 2g/t gold from 132 metres.
Image Resources generally focuses on mineral sands, however, due to the Australian gold price sitting at near record levels, the company has chosen to delve into gold exploration.
“Image will utilise resources not associated with mineral sands, to take advantage of this low risk, low-cost opportunity to evaluate the prospectivity of the highly mineralised King prospect, which could potentially lead to a better understanding of the gold mineralisation model on Image’s much larger Erayinia and Madoonia tenements,” Managing Director Patrick Mutz said.
Under the terms of the farm-in, Image has the right to spend $330,000 within 24 months to earn a 40 per cent interest in the King prospect. If and when it earns a 40 per cent stake, a joint venture can be formed between Image and the undisclosed prospect holder.
Image may then purchase a further 40 per cent interest by paying $240,000 in cash to the owners within 180 days of earning the initial 40 per cent interest.
If the company obtains an 80 per cent interest, the owners may contribute 20 per cent to future project expenditure to maintain their minority interest, or they can choose not to contribute to expenditure and convert to a 2 per cent net smelter royalty.
Image has already planned to conduct a 42-hole reverse circulation drilling program which will initially target the central thickened zone. It will also examine the supergene potential of historically-drilled areas within its Erayinia and Madoonia Downs tenements.
Image is up 6.25 per cent and shares are trading at 17 cents at 2:43 pm AEDT.