Cash injection for Cue project
EVOLUTION Mining has entered into an earn- in joint venture agreement with Musgrave Minerals over the Cue Project in the Murchison Province of central WA.
Located about 50km south of Evolution’s Murchison joint venture, it hosts a gold endowment in excess of 30m ounces 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.
The prospectivity of these tenements is demonstrated by drilling results previously released by Musgrave in December 2018, which included several promising yields.
Under the agreement, Musgrave will retain 100pc ownership of areas surrounding the Lena and Break of Day resources, and the Mainland Option area.
Evolution will subscribe for 18.6m shares of Musgrave for a cash consideration of $ 1.5m.
Subject to a decision to mine, Musgrave may elect for Evolution to fund its share of development costs, repayable with interest from commercial production.
Evolution can also earn a 75pc interest in the joint venture area by sole funding $ 18m over five years with a minimum expenditure of $ 4m to be completed in the first two years.
If Evolution does not spend the entire $ 18m within five years, Musgrave will retain full ownership.
The completion of the transaction remains subject to standard regulatory conditions.
Evolution Discovery and Business Development deputy president Glen Masterman said the project had the ability to generate new drill results that extend previously identified mineralised zones.
“The agreement is consistent with our strategy of focusing on orogenic and epithermal deposit styles that can create value through future discovery,” he said.