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De Grey Mining (ASX:DEG,OTC Pink:DGMLF) has reached its AU$7 million minimum expenditure target for the Egina gold project, located in Western Australia’s Pilbara region, according to an October 10 release.
The milestone comes after De Grey entered into a binding heads of agreement with Novo Resources (ASX:NVO,TSX:NVO,OTCQX:NSRPF) in June 2023. Under the deal, De Grey now has the right to earn a 50 percent joint venture stake in Egina by spending a further AU$18 million through to June 30, 2027.
Egina covers over 1,000 square kilometres and is located adjacent to De Grey’s Hemi gold project. The company views the asset as a key part of its strategy to expand its regional resource base.
Anomalous gold results returned during De Grey’s initial expenditure period at Egina include 6 metres at 1.2 grams per tonne (g/t) gold, 4 metres at 2.1g/t gold and 8 metres at 4.7g/t gold.
“Egina contains major structures and geological units which extend from Hemi and is prospective for both large intrusion-hosted deposits like Hemi and orogenic gold deposits,” said Phil Tornatora, De Grey’s general manager for exploration. He added that large prospective areas of Egina are still unexplored.
“Our intention is to continue to progress exploration on the Egina tenements towards forming a 50/50 joint venture subject to ongoing assessment of exploration results on the project,” De Grey said in its press release.
“To be able to partner with a group like De Grey, with its nearby Hemi deposit, provides the best opportunity for us to drive value for our shareholders at Egina, through any potential new discoveries and future exploration success,” commented Mike Spreadborough, Novo’s executive co-chairman and acting CEO.
Together, Egina and De Grey’s tenure form a land position in the Mallina Basin covering about 2,500 square kilometres.
Hemi has a resource estimate of 10.5 million ounces of gold. In late August, De Grey received AU$150 million in debt funding from the Northern Australia Infrastructure Facility. It will form part of a AU$1 billion senior debt facility and a AU$130 million cost overrun facility that are expected to help finance Hemi’s development.
As mentioned, De Grey has until the end of June 2027 to reach the additional AU$18 million spend requirement to acquire 50 percent of Egina. It will retain the role of project manager during the earn-in period.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.