Cosmo Metals has signed a terms sheet to acquire 100% of La Zarza Minerals, which holds the tenements comprising the Kanowna Gold Project (KGP) in WA.
The KGP is strategically located 1km west of Northern Star Resources’ Kanowna Belle gold operations, a producer of more than 5.4 million ounces of gold since 1993.
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The KGP spans 20km² and includes 12 prospecting licences in the Eastern Goldfields of WA. The region is renowned for its extensive gold production.
It has drill-ready targets at Don Álvaro, Laguna Verde and WKL, with several untested surfaces and shallow aircore anomalies.
These targets are situated along north-east-trending structures, which are considered similar to those of the nearby Kanowna Belle gold mine.
Under the terms sheet, Cosmo Metals will pay an initial A$200,000 ($131,176) in cash within 14 days of exercising its acquisition right, followed by A$400,000 in company shares.
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By GlobalDataThe agreement also stipulates a A$200,000 deferred payment due within six months post-acquisition, and a 0.5% net smelter royalty on gold produced from the KGP tenements.
To support this acquisition, Cosmo Metals has secured a binding commitment for a private placement to raise A$300,000, issuing approximately six million new shares at A$0.05 each.
Proceeds from this placement will partially fund the acquisition and due diligence process, as well as initial exploration and drill planning at the KGP, with the remainder allocated to working capital.
Following due diligence completion in February, Cosmo Metals plans to commence exploration at the KGP, including up to 2,000m of reverse circulation drilling to test the high-priority targets.
Cosmo Metals managing director James Merrillees said: “The potential at the KGP is compelling with proven gold mineralisation adjacent to the world-class Kanowna Belle deposit including headline drill intercepts of 18m @ 5.3 grams per tonne (g/t) gold (Au) and 10m @ 4.7g/t Au.
“The company has identified widespread near-surface gold mineralisation at the KGP associated with NE trending structures analogous to the Fitzroy Fault, which controls mineralisation at Northern Star’s adjacent +7Moz Kanowna Belle gold project.
“These NE trends have not been well targeted at the KGP and present exciting new exploration targets to guide future exploration at the KGP.”
