Evolution Mining Limited has entered into two new earn-in agreements over early stage exploration projects in Western Australia and Queensland.
Evolution will add two new projects to their portfolio which have the ability to generate new drill results that extend previously identified mineralised zones.
Evolution’s Vice President Discovery and Business Development, Glen Masterman, said the earn-in agreements are consistent with the company’s strategy of focusing on orogenic and epithermal deposit styles that can create value through future discovery.
Cue Project earn-in joint venture
The first earn-in joint venture agreement is with Musgrave Minerals Limited over the Cue Project.
Cue is located in the Murchison Province of central Western Australia which hosts a gold endowment in excess of 30 million ounces. The Cue Project is approximately 50km south of Evolution’s Murchison joint venture and is prospective for Archaean greenstone gold deposits.
The Cue joint venture covers a prospective mineralised trend, extending from Musgrave’s Lena and Break of Day resources to the south. Large parts of the fertile trend are poorly tested and extend under younger lake cover which is potentially obscuring mineralisation.
Key terms of the agreement:
- Musgrave will retain 100% ownership of areas surrounding the Lena and Break of Day resources, and the Mainland Option area
- Evolution will subscribe for 18.6 million shares (4.59%) of Musgrave for a cash consideration of A$1.5 million with the newly issued shares priced at 30 day vwap.
- Evolution may earn a 75% interest in the project area (Figure 1) by spending A$18.0 million over a five-year period, with a minimum spend commitment of A$4.0 million over two years
- Evolution will determine the exploration program and budget during the earn-in period with Musgrave to operate the project during the minimum spend period
- On completion of the earn-in, each party is to fund their pro-rata share of expenditure
- Subject to a decision to mine, Musgrave may elect for Evolution to fund their share of development costs, repayable with interest from commercial production
Crush Creek earn-in agreement
The second earn-in agreement Evolution has entered into is with private entity Basin Gold Pty Ltd over the Crush Creek project.
Crush Creek is located 10km north west of Collinsville, Queensland, and approximately 30km south east of Evolution’s Mt Carlton operation. Crush Creek hosts low sulphidation epithermal gold mineralisation which Evolution believes has significant potential to provide mine life extensions at Mt Carlton.
Key terms of the agreement:
- Initial cash payment to Basin Gold of A$2.0 million on grant of the Mineral Development License (MDL)
- Evolution to earn a 70% interest by sole funding A$7.0 million of exploration expenditure over a two-year period
- Once the earn-in is met, either party has the option to elect for Basin Gold’s 30% interest to be sold to Evolution for a consideration of A$4.5 million and a 10% Net Profit Interest (NPI) on any production above 100koz of gold