The Eyre Peninsula Gold Project comprises 6 tenements covering a total area of 1,928 sq kms located in the Central Gawler Craton Province on the Eyre Peninsula in South Australia. The Wudinna Gold Camp within the Eyre Peninsula Project is comprised of a cluster of gold projects which includes the Barns, White Tank and Baggy Green deposits located within 6 kms of each other. The Eyre Peninsula Gold Project is a joint venture between Andromeda Metals and Cobra Resources under which Cobra can earn, through its 100% owned subsidiary Lady Alice Mines, up to a 75% interest in the project through expenditure of $5 million over 6 years from October 2017.
Geological Setting – The Central Gawler Gold Province
The Central Gawler Gold Province is a belt of gold-dominant mineralisation which formed approximately 1590 million years ago during the regionally extensive Hiltaba/GRV tectonothermal event. Gold mineralisation at the Barns, White Tank and Baggy Green deposits is hosted by variably deformed granodiorite/gneiss interpreted to belong to the Tunkillia Suite, a group of 1690Ma granitiods that form important host rocks in the Central Gawler Gold Province.
Interpreted mineralisation at Barns extends over an area of 400 mN by 250 mE and is up to 200 metres deep. Two lodes of flat-lying supergene mineralisation and 12 lodes of shallow dipping, fresh mineralisation have been interpreted.
At White Tank, the interpreted mineralisation extends for 250 mN by 150 mE and is up to 120 metres deep. One lode of flat-lying mineralisation and 2 shallow dipping lodes of mineralisation within fresh material have been interpreted.
The Baggy Green deposit has 2 areas of mineralisation: within the south the interpreted mineralisation extends over an area of 200 mN by 400 mE and in the north it extends over an area of 150 mN by 300 mE. One lode of flat-lying supergene mineralisation and 13 shallow dipping lodes of mineralisation have been interpreted within the fresh material to a depth of 200 metres.
A JORC 2012 Mineral Resource has been determined for the Barns, White Tank and Baggy Green deposits of 4.43 million tonnes at 1.5g/t for 211,000 ounces of gold using a cut-off grade of 0.5g/t. The Mineral Resource comprises 4.02 million tonnes at 1.5g/t gold for 193,000 ounces of Inferred Resource and 0.41 million tonnes at 1.4g/t gold for 18,000 ounces of Indicated Resource.
A total of 104,000 gold ounces is assigned to the Barns deposit comprising 18,000 Indicated and 86,000 ounces Inferred. Baggy Green has 94,000 ounces and White Tank 13,000 ounces both categorised as Inferred.
Eyre Peninsula Gold Project Joint Venture Terms
The principal terms of the Eyre Peninsula Gold Project Joint Venture between Andromeda Metals and Cobra Resources which was executed on 31 October 2017 are as follows:
- Cobra will sole fund $2.1 million within 3 years of execution to earn a 50% equity position (Stage 1 earn-in);
- at the end of Stage 1, a joint venture can be formed, or alternatively Cobra can spend a further $1.65 million over a further 2 years (total funding of $3.75 million over 5 years) to earn a 65% equity interest (Stage 2 earn-in);
- at the end of Stage 2, a joint venture can be formed, or alternatively Cobra cab spend a further $1.25 million over a further 12 months (total funding of $5.0 million over 6 years) to earn a 75% equity interest (Stage 3 earn-in);
- once a joint venture is formed, the parties will contribute to further expenditure in accordance with their respective equity, or dilute using a standard dilution procedure;
- should a party's equity fall below 5%, its equity will be compulsorily acquired by the other party at a price to be negotiated in good faith, or failed agreement, at a price determined by an independent valuer;
- Cobra must meet requisite statutory expenditure requirements tp keep the project tenements in good standing;
- Cobra will act as manager during the farm-in and thereafter while ever it holds at least 50% equity.