Last week, E79 Gold Mines (ASX: E79) announced the acquisition of the Cue gold project, an underexplored piece of ground in a Western Australian gold hot spot.

The 70 square kilometre project sits in the Day Dawn Goldfield, immediately south of Westgold Resources’ high-grade Great Fingall gold mine, which has historically produced 1.2 million ounces of gold at an eye-watering grade of 19.2 grams per tonne gold.

The ground is also immediately north of tenements held by mid-tier producer Ramelius Resources (ASX: RMS), which includes the high-grade Break of Day discovery.

Cue is considered prospective for high-grade quartz reef-hosted gold deposits similar to Great Fingall and Break of Day.

The district is characterised by small, but high-grade, deposits, although exploration has been hampered by post-mineralisation cover.

E79’s new ground remains underexplored but five priority targets – Ada, Chloe, Riptide, Transformer and MBA23 – have been delineated.

Previous drilling has been limited but results have included 13m at 2.2g/t gold from 112m to the end of the hole and 20m at 0.6g/t gold from 45m in at Ada; 2m at 4.8g/t gold from 90m at the Chloe gold prospect; 4m at 0.6g/t gold from 32m at Riptide; and 4m at 4.4g/t gold from 36m at MBA23.

Previous drilling has, on average, only tested the top 50m from surface.

E79 CEO Ned Summerhayes said the company’s exploration campaign at Cue would be aggressive and focused.

“The Cue gold project is situated in a discovery and M&A hotspot within one of the best gold addresses in Australia,” he said.

“The area contains Westgold’s famous high-grade Great Fingall and Golden Crown gold mines, Ramelius Resources’ Break of Day mine and other exciting projects such as Caprice Resources’ Island gold project.

“Not many junior explorers get the opportunity to secure ground with gold discovery potential like this in such a tightly held region.”

Low-cost entry

E79 is picking up the Cue project from trusts connected with Matthew Bowles, Glenn Martin and Oliver Cairns (no relation of E79 chairman Chris Cairns).

The acquisition includes an option agreement whereby up to A$1.2 million in cash or shares will be due to the tenement holders on the achievement of certain resource delineation milestones.

As part of the transaction, Bowles will join the E79 board as a non-executive director.

Bowles was previously managing director of Murchison gold explorer Alto Metals, until it was recently acquired by Brightstar Resources, and now runs South Australia-focused gold explorer Indiana Resources (ASX: IDA).

Martin, who was previously chief geologist for Musgrave Minerals when it discovered the Break of Day deposit, will be appointed as a technical consultant. 

“The Cue gold project represents a highly prospective area which remains underexplored due to post-mineral cover and shallow broad-spaced drilling,” Martin said.

“It has all the ingredients to contain significant high-grade gold deposits that this part of the Murchison Province is renowned for.”

Last week during a webinar, former Musgrave boss Rob Waugh was asked how much gold there was to still be discovered in the Cue region.

“There’s been 130 years of mining there to date, and there’s probably been, somewhere around that 20 to 30 million ounces,” he said.

“You probably double that, so that depends how long you want to wait. Does it take 100 years to do that, or does it take 20? But there’s a lot more to be discovered.”

To fund E79’s work on the project, the company is raising A$3 million at A2.1c per share, managed by GBA Capital.

The issue price represents a 12.8% discount to the five-day volume-weighted average price prior to the announcement.

Directors will subscribe for A$115,000 worth of shares, subject to shareholder approval.

Exploration to continue

E79 listed on the ASX in 2021 with a strategy of discovery through early-stage exploration in the under-explored parts of large mineralised systems.

Aside from the new Cue acquisition, the Company holds 2,336km2 of ground in the highly endowed Yilgarn Craton of Western Australia and the McArthur Basin of the Northern Territory – where it was recently awarded two co-funded exploration grants for drilling and geophysics targeting copper, gold and bismuth.