In a strategic move to bolster its growth prospects, Ora Gold Limited (ASX: OAU) has announced its intention to significantly expand its Garden Gully Gold Project through the acquisition of Sipa Resources Limited’s (ASX: SRI) Murchison Project in Western Australia.
Unlocking the Potential of the Murchison Project
The Murchison Project, situated adjacent and to the south of Ora Gold’s existing Garden Gully Gold Project, represents a highly prospective yet underexplored region covering approximately 460km² comprised of 14 exploration licenses and 3 applications for exploration licenses, effectively tripling the size of Ora Gold’s current 217km2 ground position in the region.
Figure 1: Garden Gully tenements Adjoining Sipa Murchison Project Tenements (100% and JV)
Importantly, the newly acquired tenure lies adjacent to known gold occurrences, overlies fertile structures in the Murchison and Abbotts Greenstone Belts, and represents an untapped territory with limited drill testing of basement rocks.
Additionally, the Project areas are contiguous with Ora Gold’s Garden Gully Project, consolidating the majority of the Abbotts Greenstone Belt under the combined holding of Sipa and Ora Gold’s tenements.
Transaction Details and Consideration
Under the terms of the agreement, Ora Gold will pay a total consideration of $1.4 million to Sipa, comprising a cash payment of $600,000 and the issuance of $800,000 worth of Ora Gold shares. Notably, half of the shares will be subject to a voluntary 12-month escrow period, ensuring alignment with the Company’s strategic objectives.
The transaction is anticipated to reach completion around August 31, 2023, with an initial 50% of the cash payment and share consideration due upon closing. The remaining balance will be settled within three months after completion.
As part of its strategic approach to grow the Garden Gully Project to scale, Ora Gold will focus on drilling and expanding known mineralisation at the Crown Prince Prospect, which recently demonstrated its potential following high-grade drilling intercepts with grades up to 58.53g/t Au.
The regional exploration program, set to begin in the next three months, will complement ongoing drilling efforts, ensuring comprehensive and systematic exploration across both the existing and newly acquired tenements.
Ora Gold’s CEO, Alex Passmore, expressed enthusiasm for the acquisition, stating, “We are pleased to announce the acquisition of very prospective additional tenure adjacent to our existing Garden Gully Project. The tenement package includes extensions to the Abernethy shear zone in the southern part of our existing project area which shows substantial gold anomalism along a +5 km strike.”
“Additionally, the southern and south eastern newly acquired areas are in prospective zones and are located near recent past producing mines (Reedy and Burnakura). Exploration on the new tenure will be incorporated into a regional exploration program with drilling to be undertaken in the coming 3 months.”
OAU’s Australian Stock Exchange-listed share price was trading at 0.6c today (11:28 am UTC+ 8 hours).