The Excelsior prospect is interpreted to host structurally controlled gold mineralization developed within quartz veins
Leviathan Gold enters into Heads of Agreement in regard to the Excelsior Prospect at its Avoca Project. (Credit: Albert Hyseni on Unsplash)
Leviathan Gold Ltd. (“Leviathan”, the “Company”) (TSXV: LVX) (Germany: 0GP) is pleased to announce that its wholly-owned subsidiary, Leviathan Gold (Australia) Pty Ltd., has entered into Heads of Agreement (“HOA”) with Core Prospecting Pty Ltd. (“Core”) in regard to the Excelsior Prospect at its Avoca Project in the Victorian goldfields, Australia.
Under the terms of the HOA, Core – a private small-scale mining contractor based in Bendigo – may earn an initial 40% interest in a three square kilometre area within EL5387 (the Excelsior Area of Interest, or “AOI”) by completing, at Core’s sole cost and expense, 2,000 metres of diamond drilling including assays by January 17, 2024 (“Phase 1”), and a further 35% interest in the AOI for an additional 4,000 metres of diamond drilling including assays and by preparing an independent JORC report (the “JORC Report”) identifying at least Indicated or Measured Mineral Resource within 12 months from the end of Phase 1, each at Core’s sole cost and expense (“Phase 2”). In lieu of completing such further drilling, Core may instead prepare, at its sole cost and expense, a JORC report containing Indicated or Measured Mineral Resources (or both) of not less than 50,000 ounces of gold at a cut-off grade of 2.5g/t Au within the AOI. Upon fulfilment of certain conditions by Core, Leviathan shall on behalf of Core apply for a standalone tenure over the AOI, (the “New Tenement”). If Core fails to complete Phase 2 they shall forfeit any interest under Phase 1 and shall have no interest in the AOI.
Upon Core having attained a 75% equity interest in the AOI, Leviathan may either contribute its share of costs and maintain its equity interest, or be diluted pro-rata to a minimum carried interest of 5%, which Core shall purchase from Leviathan for the sum of AUD$150 per ounce of Indicated or Measured Mineral Resources (or both) as estimated in the JORC Report, payable upon commencement of gold production. Alternatively, Core may, within 12 months of the completion of Phase 2, purchase Leviathan’s holding in the AOI for the sum of AUD$75 per ounce of Indicated or Measured Mineral Resources (or both) in the JORC Report, or Core may within 12 months of the completion of Phase 2 purchase Leviathan’s holding in the Excelsior AOI by paying instalments of AUD$25,000 per quarter, increasing to AUD$75,000 per quarter, commencing from the date on which a New Tenement is granted and continuing for the life of any gold production mine located within the area of the AOI.
The HOA also provides that Leviathan may, subject to Core first completing Phase 1, claw back Core’s equity stake in the AOI for the sum of AUD$500 per meter drilled, or after receipt of the JORC Report for AUD $150 per ounce of gold mineralisation estimated and classified as an Indicated Mineral Resource or a Measured Mineral Resource (or both) in the JORC Report.
The intent of the work programs contemplated by the HOA is to build on drilling completed by Leviathan in 2021, and to define economic gold mineralization at the property. The most prominent intervals among results reported to date from Excelsior include 8.24 g/t Au over 6.63 meters from 161.95 meters in hole EH003 (press release of April 21, 2021) and 5.40 g/t Au over 11.02 meters from 84.37 meters in hole EH005 (press release of April 26, 2021). These intervals are believed to represent the down-dip continuation of mineralization observed in historic mine workings, and are characterized by intense quartz veining, visible gold, and enveloping sericitic alteration and base metal sulphides. Additional drilling will be required to determine the true thickness of mineralization.
It is anticipated that drilling by Core commence in September 2023, and this will be reported on accordingly.
Leviathan Gold Chief Executive Officer, Luke Norman, remarked: “We are delighted to have struck this deal with Core, who as a highly skilled and reputable local mining contractor are ideally placed to further exploration at Excelsior and to bring near term value to the project. Past work at Excelsior confirmed not only the presence of high-grade gold mineralization across multiple sample intervals, but also continuity of this mineralization between drill holes within and beyond historical mine workings. With historic records from Excelsior indicating 9,260 ounces of production from an ore shoot at near-ounce grades, our target today is the extension of this system to depth and along strike – and repeats beyond this”.
Source: Company Press Release