The Drummond Epithermal Gold Project comprises four tenements securing a total area of 523 sq kms in the gold prospective Drummond Basin in northern Queensland 90kms south-east of Charters Towers.
Surface geochemistry and prospecting conducted by Andromeda Metals has defined four previously untested targets on the Drummond Project. The Bunyip prospect is one of these and comprises 2,000 metres of outcropping quartz vein containing anomalous gold and high-level pathfinder metals suggesting it is an epithermal system eroded to shallow levels with any gold zone potentially preserved at depth.
Geological Setting – The Drummond Basin
The Drummond Basin hosts a number of significant, high grade epithermal gold deposits, the most notable being the ~3 million ounce Pajingo Field approximately 70 kms to thw west..
The Company’s Drummond Epithermal Gold Project tenements secure volcanic dominated stratigraphy of the Drummond Basin just south of the interpreted boundary with older Mt Windsor Volcanics and intrusives of the Lolworth-Ravenswood Block, a geological setting similar to that seen at the Pajingo Field, located about 70 kilometres to the west.
An epithermal gold deposit is one in which gold mineralisation is deposited relatively close to the ground surface from hot volcanic fluids. The fluids are estimated to range in temperature from less than 100°C to about 300°C and, during the formation of a deposit, can appear at the surface as hot springs and geysers. Gold is carried in solution and is deposited when the water approaches the land surface and boils. Epithermal deposits are formed during periods of active volcanism around the margins of continents, a geological situation that existed in the Drummond Basin during the Late Devonian to Carboniferous.
Epithermal deposits exhibit a number of characteristic geological features including specific vein textures, alteration assemblages and the presence of associated pathfinder metals, all of which vary depending upon the vertical position in the system. A general model of an epithermal deposit is shown below.
Geological model of an epithermal gold system
Joint Venture with Evolution Mining
Andromeda Metals entered into a binding Earn-in and Exploration Joint Venture with Evolution Mining Limited (ASX: EVN) on 31 August 2018 over the Drummond Gold Project under the following terms:
- Evolution to pay Andromeda a non-refundable cash consideration of $300,000 within 10 days of siigning the agreement;
- Evolution can earn a 51% interest in the Project by sole fnding $2.0 million on exploration activities across the Project tenements within 2 years of execution of the agreement (Stage 1 Commitment);
- on completion of Stage 1 Commitment, Evolution may elect to acquire a further 29% equity interest (80% in total) through a payment of a further cash consideration of $200,000 within 10 business days of the election to continue to sole fund by Evolution, and expenditure of an additional $4.0 million ($6.5 million in total) over a further 2 years (4 years in total) (Stage 2 Commitment)'
- on completion of Evolution's sole funding commiments, either party may elect not to contribute to a proposed joint venture program and budget, in which case their interest in the joint venture will be reduced in accordance with a standard industry dilution formula;
- if either party dilutes to less than 10% equity interest in the joint venture, the that party's interest will be deemed to have converted to a 2% net smelter royalty payable with respect to any minerals produced from the Project tenements, capped to a maximum of $10 million;
- Evolution is to manage and operate the joint venture whilst it is sole contributing and thereafter while ever it holds a major equity.