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The Board of Lefroy Exploration Limited (ASX: LEX) ("Lefroy" or the "Company") is pleased to provide an update to the Western Lefroy farm-in ("WLFI") with St Ives Gold Mining Company Pty Ltd, a wholly owned subsidiary of Gold Fields Limited (NYSE: GFI) ("Gold Fields").
The Lefroy Gold Project (LGP) is wholly owned by the Company and is located approximately 50km to the southeast of Kalgoorlie in the Eastern Goldfields Province of Western Australia (Figure 1). The commanding, semi-contiguous, granted land package covers 637.6km2 immediately east of and adjoining the world class +10Moz St Ives Gold camp, owned and operated by Gold Fields. The project is also immediately south of the high-grade Mt Monger gold centre operated by Silver Lake Resources Limited (ASX:SLR) ("Silver Lake"). Four gold processing operations are strategically located within 50km of the project and provide commercial options for processing any gold resources discovered.
LGP is referenced in two packages:
Western Lefroy Gold Project (Farm-In and JV: Gold Fields right to earn 70%)
In accordance with the Farm-in and Joint Venture Agreement dated 7 June 2018 (Principal Agreement) and as described in the Lefroy Exploration Limited ASX release dated 7 June 2018, Gold Fields had the right to fund $10million of expenditure within 3 years of the commencement date to earn the right to a 51% joint venture interest.
Gold Fields has provided Lefroy with quarterly JV expenditure reports since commencement, and LEX has announced this expenditure since commencement in its Quarterly ASX reports. Gold Fields recently notified Lefroy that the full Stage 1 commitment would not be met due to operational delays and delays in accessing land-based exploration targets, and that it would rely on the Shortfall clause in the Principal Agreement to satisfy the Stage 1 Farm-in Requirement. The estimated shortfall in expenditure is $2.76million.
The parties have worked constructively to execute a Side Deed to allow the terms of the payment of the Shortfall to be satisfied in two parts as follows:
Payment of the shortfall is to be made within 20 Business Days of 7 June 2021 in accordance with the Principal Agreement, with a Satisfaction Notice to follow afterwards in accordance with the terms of the Principal Agreement governing the WLFI and Joint Venture.
Gold Fields then has the option to elect to proceed to the Stage 2 earn-in, which allows Gold Fields to sole fund a further $15 million of expenditure over 3 years to earn an additional 19% interest to a total interest of 70%. If Gold Fields makes such election, then its sole funding obligations, and exclusive rights for exploration on the WLFI Tenements (but not including the Excluded Area) will continue in accordance with the Principal Agreement.
Coogee South Prospect
The Coogee South Prospect is located immediately along strike to the south of the high grade Coogee open pit (Figure 2), which was successfully mined by Ramelius Resources Limited ("Ramelius" and ASX: RMS) during 2014. Ramelius trucked the ore over 100km to the Burbank's mill at Coolgardie, demonstrating that small high-grade deposits can be commercially developed.
The Company believes that the Coogee deposit is part of a larger gold system that surrounds a buried felsic intrusion (Figure 2). Further evidence of this is the discovery of a new occurrence of gold and copper mineralisation by Victory Mines Limited ("Victory" and ASX:VIC) in recent reverse circulation (RC) drill holes north and south of the Coogee open pit (VIC ASX release 11 May 2021).
Victory have recently announced the commencement of a 6000m reverse circulation (RC) drilling program at Coogee North, locate approximately 400m north of the north of the Coogee Pit. That program is following up earlier copper and gold intersections within altered porphyry intrusive and mafic host rocks.
The priority target at Coogee South is the area immediately along strike to the south of the Coogee Open pit, where RC drilling in 2006 recorded a best intersection of 17m at 1.67g/t Au from 99m in CSRC03 (Figure 2). The are remains open down dip and along strike. The RC drilling results are supported by a gold-copper anomaly defined by rotary air blast (RAB) drilling completed in the mid 1990's that extends for approximately 500m to the south of the VIC- LEX tenement boundary.
Given that the early (1980-1990's era) RAB drilling was shallow and considered only partially effective, the first exploration program planned for Coogee South will evaluate the mineralised trend with deeper penetrating air core hammer drilling. Bedrock targets generated from this phase of drilling will be tested by RC drill follow up. RC drilling is also planned to follow up and step out from the 2006 RC intersection of 17m at 1.67g/t Au in CSRC003.
The Company considers Coogee South to be a high priority, drill ready gold target and was the priority target in the Company's 2016 Prospectus. The occurrences in earlier drilling of gold and copper mineralisation rimming a granitic intrusion (Figure 2), with associated magnetite alteration, are encouraging indicators with similarities with to the nearby Burns prospect.
This announcement has been authorised for release by the Board