Hipo Resources is buying into a package of Central Queensland gold projects, including the historical Belyando and Lucky Break open-pit mines.
It has announced a binding heads of agreement with Zamia Metals to acquire up to 70 per cent of Zamia Resources, which holds four exploration permits over about 115 sq km in the Drummond Basin region.
Shallow open-cut operations in the 1980s and early 1990s produced about 93,000oz of gold at Belyando (pictured above) and Lucky Break.
Hipo described the tenements as boasting compelling geology, vastly under-explored and under-developed.
“Zamia’s highly experienced technical team will undertake a multi-faceted exploration program commencing at transaction close with a view to rapidly defining a JORC mineral resource estimate as well as identify potential new ore bodies and ore body extensions,” Hipo said in a company statement to the ASX.
Hipo can earn a 30 per cent stake in Zamia Resources with an initial spend of $500,000 and move to 50 per cent by spending a further $1 million. Zamia will also be issued 40 million shares subject to a 12-month voluntary escrow.
Hipo has the ability to earn a total of 70 per cent in Zamia Resources on terms to be agreed regarding further expenditure.
“This is an excellent transaction for Hipo and we are confident we can deliver significant value to shareholders through a multi-faceted exploration program in and around the dormant open-pit mines and the potential mineralisation extensions along strike and depth,” Hipo executive chairman Maurice Feilich said.
“Of equal appeal are the very compelling high-value targets that Zamia’s experienced team have defined across the ~115sq km of exploration licences; they hold outstanding exploration potential.”