Australian firm Battery Minerals has signed a binding agreement to purchase a 67% stake in Gippsland Prospecting.

After winning a tender from the government of Victoria in Australia, Gippsland Prospecting gained sole right to apply for an exploration licence next to exploration firm Stavely Minerals’ copper-gold project in Victoria, known as the Thursday’s Gossan project.

The tenement, called Block 4, covers 809km² and hosts the Moyston gold mine, which produced 75,000 ounces (oz) grading at 22 grams per tonne (g/t) of gold. It had previously been explored by BHP in 1997.

The exploration licence is just 7km from the Stawell gold mine, which has produced 5Moz of gold.

Battery Minerals will pay Gippsland shareholders $335,000 and issue 294,373,780 shares in return for the 67% stake.

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By GlobalData

Battery Minerals chairman David Flanagan said: “Block 4 has the same rocks that host the Thursday’s Gossan copper-gold discovery and it is in the same corridor that hosts Navarre’s gold discoveries. Block 4 also hosts the Moyston gold mine and it is right next door to the Stawell gold mine.

“The tenement has not been thoroughly explored for more than a decade and even then, it was limited to shallow drilling near the Stawell mine.

“Given the recent substantial exploration success close by and the outstanding prospectivity of the geology, we are looking forward to applying modern exploration techniques and drilling to a new project that has effectively been mothballed for over ten years.”

The acquisition is, however, dependent on Battery Minerals shareholders’ approval and the grant of the exploration licence.

If the deal goes ahead, Gippsland directors Kent Balas and Darryl Clark will become directors of Battery Minerals.

In November 2017, Battery Minerals signed a memorandum of understanding with Chinese firm Qingdao Guangxing Electronic Materials to execute offtake agreements and develop an international product marketing strategy.