Chalice Gold Mines (CXN-T) and Traka Resources (TKL-ASX) Sept 22, '16 are pleased to advise that they have entered into a binding Heads of Agreement in relation to the Latitude Hill Nickel-Copper-PGE Project, located in the west Musgrave Province of Western Australia.
The project covers an area of 1,007 km² and is centred approximately 40km south-west of the Wingellina nickel deposit in the west Musgrave Province.
The latitude Hill Project is considered prospective for massive and disseminated nickel-copper-PGE sulphide mineralisation in Giles Complex mafic to ultramafic intrusives, providing Chalice with a counter-cyclical investment opportunity in an under-explored frontier province where there is excellent potential to make substantial new discoveries, similar to the discovery of the Nova-Bollinger nickel-copper sulphide deposit in the Albany-Fraser orogen.
Under the terms of the farm-in agreement Chalice may earn up to 70% interest in the Latitude Hill Project, which consists of five tenement applications ( Figure 1).
The Latitude Hill Project represents an exciting opportunity for Chalice to capitalise on a high quality airborne Spectrem Electromagnetic (EM) survey completed in 2012, which identified seven priority conductors which are modelled as high-conductance bedrock anomalies ( Figure 2). Importantly, none of these priority conductors have been followed-up with ground-based exploration as the tenements are held under application, which does not permit ground activity until the tenements are granted.
The Latitude Hill Project lies within the southern part of the west Musgrave Province in an area of widespread but thin colluvium and sand dune cover estimated at less than 10m thick. Along the eastern edge of the tenement package the local geological sequence is dominated by the well exposed Giles Complex Bell Rock Range layered mafic to ultramafic intrusives. Within the project area outcrop is poor but Geological Survey of Western Australia mapping has identified localised outcrops of mafic intrusive rock-types that have similar character to the Bell Rock Range mafic intrusives.
Of the prioritised EM targets, six have associated subtle to strong linear magnetic anomalies with a morphology consistent with shallow-plunging chonolith intrusive bodies. Chonoliths represent pipe-like magma conduits which have focused magma emplacement and are important host structures for orthomagmatic nickel-copper-PGE sulphide deposits. The significance of the interpreted magnetic bodies associated with the EM conductors is that chonolith-type intrusive bodies host the large Nebo-Babel nickel-copper-PGE deposits, located about 100km west of Latitude Hill in the west Musgrave Province.
An important observation from historical exploration in the west Musgrave Province is the lack of graphitic sediments, which can be the source of bedrock EM conductive responses. The priority EM targets in the Latitude Hill Project are modelled with a high conductance – which is consistent with a source from bedrock sulphides. This supports the interpretation that the priority EM conductors are highly prospective for massive nickel-copper-PGE sulphides.
Farm-in Agreement Terms
Key terms agreed are as follows:
Chalice to spend a minimum of A$1 million on exploration within the first 12 months from the grant of the tenements; Chalice has the right, after meeting the minimum commitment, to earn a 51% interest by the expenditure of A$5 million (which includes the minimum spend) within 3 years of commencement; If Chalice earns a 51% interest, Chalice must advise Traka whether it wishes to increase its interest to 70%. Traka then has 14 days to notify Chalice as to whether it wishes to maintain its interest at 49% by proportionally contributing to all future expenditures or not; If Traka does not wish to maintain the 49% interest, Chalice has the right but not the obligation to expend a further A$5 million, within an additional three years, to increase its interest to 70%; and If Chalice earns a 70% interest (or 51% as the case may be) both parties will contribute proportionally to all expenditures going forward.
Planned Exploration Program
Chalice and Traka will work together to progress the tenements to grant. Once granted, Chalice will undertake ground EM surveying over all priority targets to better define the conductors and to identify stronger EM responses which may potentially indicate higher abundances of sulphides.
Follow-up exploration work will comprise a program of shallow aircore traverse drilling for regolith and bedrock geochemical sampling. The EM conductors will be tested by Reverse Circulation (RC) drilling to provide a definitive test of the stronger conductive responses.
Chalice's General Manager – Exploration, Dr Kevin Frost, an expert in nickel-copper-PGE sulphide exploration and a co-recipient of the AMEC Prospector Award for the 2009 discovery of the Spotted Quoll nickel sulphide deposit says 'The Latitude Hill project presents a unique first-mover opportunity to undertake focused exploration on high quality airborne EM targets situated in a fertile geological terrain. EM geophysics has played a significant role in the discovery of massive nickel-copper sulphide deposits worldwide.'
JORC 2012
Further details on reporting of exploration results and estimation can be found within the JORC 2012 tables by clicking here.
TIM GOYDER
Managing Director
Chalice Gold Mines Limited
Competent Persons and Qualifying Persons Statement
The information in this report that relates to Exploration Results in relation to the Latitude Hill Project is based on information compiled by Dr Kevin Frost BSc (Hons), PhD, who is a Member of the Australian Institute of Geoscientists. Dr Frost is a full-time employee of the company and has sufficient experience in the field of activity being reported to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and is a Qualified Person under National Instrument 43-101 – 'Standards of Disclosure for Mineral Projects'. The Qualified Person has verified the data disclosed in this release, including sampling, analytical and test data underlying the information contained in this release. Dr Frost consents to the release of information in the form and context in which it appears here.
SOURCE Chalice Gold Mines Limited
Image with caption: "Figure 1 - Location of Latitude Hill Project (CNW Group/Chalice Gold Mines Limited)". Image available at: http://photos.newswire.ca/images/download/20160922_C7032_PHOTO_EN_779411.jpg
Image with caption: "Figure 2 - Aeromagnetic image showing location of Latitude Hill Project tenements (CNW Group/Chalice Gold Mines Limited)". Image available at: http://photos.newswire.ca/images/download/20160922_C7032_PHOTO_EN_779413.jpg
PDF available at: http://stream1.newswire.ca/media/2016/09/22/20160922_C7032_PDF_EN_779415.pdf
Tim Goyder, Managing Director, Chalice Gold Mines Limited,
Telephone +618 9322 3960 |
