- Junior gold explorer Meteoric Resources (MEI) is buying up the Palm Springs Gold Project for $1 million
- The WA-based project returned some significant results from exploration in the late 90s but has not been explored properly since
- With today’s purchase, Meteoric will grab an interest in several mining, exploration, and prospecting licences over 12,500 hectares of land
- To support the buy, Meteoric has launched a $1.44 million capital raise under which it will place roughly 90 million new shares at 1.6 cents each
- Shareholders seem pleased with today’s purchase, with Meteoric shares trading nearly 40 per cent higher and worth 2.6 cents each in early afternoon trade
Junior gold explorer Meteoric Resources (MEI) is set to notch the Western Australia-based Palm Springs Gold Project to its belt for $1 million.
The company owns the Juruena and Novo Astro Goold Projects in Central Brazil but has made the call to begin some gold exploration a bit closer to home.
Meteoric will fork out $750,000 in cash for the purchase, with the remaining $250,000 to be paid in MEI shares priced at two cents each. Under the deal, Meteoric will take full control of Horrocks Enterprises and Kimberly Resources, which own Palm Springs, from Rimbal and Pinnacle Nominees.
To support the purchase, the company has launched a $1.44 million capital raise. Meteoric will place roughly 90 million new shares to sophisticated and professional investors at 1.6 cents each to raise the funds, which will be used to both buy the project and finish the first round of drilling in the Palm Springs area.
Why the buy?
Historic exploration at Palm Springs was a major factor in Meteoric’s decision to buy the project.
Meteoric Managing Director Dr Andrew Tunks said the company has been looking for an Australian gold project since early 2020 to go hand-in-hand with its ongoing Brazilian exploration.
“The Palm Springs Gold Project is an advanced exploration opportunity based around a historic open-pit mine that shut down at a time of exceptionally low gold prices,” Andrew said.
The project produced roughly 52,000 ounces at 2.1 grams per tonne of gold from the Butchers Creek Open Pit gold mine in the late 1990s. According to Meteoric, mining at the project was only stopped because at the time, the gold price was at a historic low.
“The Butchers Creek pit is quite shallow (25 metres in the south to 70 metres in the north) and there is substantial drilling beneath the pit that indicates the orebody is open at depth and down plunge to the south,” Andrew explained.
This drilling beneath the Butchers Creek Open Pit returned some significant results, including a 68-metre intersection grading 2.5 grams per tonne of gold from 44 metres and a 19-metre intersection grading 8.8 grams per tonne of gold from 56 metres.
Andrew said during the company’s due diligence process, it became clear that Butchers Creek has had no modern exploration since it closed in 1997. He said across the rest of the project, there are another 60 known gold occurrences, many of which remain undrilled.
However, mining giant Northern Star Resources (NST) previously completed drilling and a mineral resource at the Golden Crown and Faugh-a-Ballagh prospects, with results including a two-metre intersection grading a whopping 174.7 grams per tonne of gold from 12 metres.
Today’s buy gives Meteoric an interest in three mining licences, four exploration licences, and seven prospecting licences covering more than 12,500 hectares of land.
“The Palm Springs Project is a fantastic addition to MEI’s gold portfolio,” Andrew said.
“Importantly, the project is ideally situated, only 30 kilometres south-east of Halls Creek with excellent road access, has known metallurgical recoveries over 90 per cent from a standard carbon-in-leach circuit and granted Mining Leases covering the main zones of mineralisation at Butchers Creek,” he touted.
Shareholders seem pleased with today’s buy, with Meteoric shares trading 36.84 per cent higher in early afternoon trade. Shares are currently worth 2.6 cents each in a $29.18 million market cap.