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Riversgold has entered into a binding agreement to acquire an exploration tenement from Black Cat Syndicate, increasing the area surrounding its Northern Zone gold project near Kalgoorlie by approximately 15 times.
The agreement covers the acquisition of a 12km² exploration licence from Black Cat’s wholly owned subsidiary, Black Cat (Kal East), which borders the Northern Zone to the west, north, and south.
Upon completion, the immediate project area will increase from 0.82km² to 12.82km², allowing Riversgold to investigate potential extensions of known gold mineralisation beyond its existing mining lease.
Under the agreement, Riversgold will pay $1 million in cash and issue 111,111,111 shares to Black Cat at a deemed price of 0.9 cents per share. Black Cat will also retain a one per cent net smelter return royalty over minerals extracted from the acquired tenement, in addition to an existing one per cent royalty payable to Mining Equities.
Riversgold chairman David Lenigas said the acquisition would remove a longstanding constraint on exploration at Northern Zone.
“The acquisition of this Black Cat tenement is a real game changer for the company. It gives us a 15-fold increase in the immediate project area,” he said.
“Our drilling at Northern Zone confirms we have strong mineralisation heading towards the Black Cat ground and we intend to start drilling westwards as soon as permits are in place.”
Previous drilling near the western boundary returned intersections including 16m at 4.69 grams per tonne (g/t) gold from 30m and 15m at 2.10g/t gold from 36m.
Riversgold has also identified several potential intrusion-related gold targets across the additional tenement through magnetic interpretation. The company said much of the historical drilling in the area was shallow and had not adequately tested the underlying geology.
Riversgold is planning an initial air core drilling program targeting the western extension of Northern Zone, subject to permitting.
The acquisition is expected to be completed within three months, subject to conditions including consent relating to an existing royalty. Black Cat will receive a right of first refusal to process ore from the tenement if Riversgold seeks third-party toll treatment.
The transaction will not change the current approval timetable for Northern Zone’s mine development and closure proposal, which was submitted on 30 September.
“The deal is transformative for Riversgold, as it unlocks scale to this project, which has for many years been limited by tenement boundaries,” Lenigas said.
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