TERRAIN Minerals shares jumped 20% today after the company entered an option agreement to acquire the Rembrandt gold project in Western Australia’s Goldfields for a consideration of $A1.
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The company will complete a minimum exploration spend of $A25,000 across Rembrandt, currently held by private entity Rembrandt Mining, to facilitate a three-month exclusive option on the project. Once the drilling is complete the company can elect to proceed with the acquisition of the project for a grand total of $1, with Rembrandt to receive a free-carried share of profit worth 25% for up to 15,000 ounces of gold produced and 15% of gold produced thereafter. A 1% net smelter royalty will apply to all material mined other than gold, and Rembrandt will retain prospecting rights. Terrain executive director Justin Virgin said the acquisition was the right fit for the company. “Through the low cost option structure entered into with Rembrandt, Terrain has exposure to a high-grade project with significant exploration upside, without an onerous cost structure,” he said. “Terrain will rapidly test the potential of Monet prospect and determine if it represents a near-term cashflow opportunity for the company. “Additionally Terrain is seeking similar opportunities which have the potential of providing significant shareholder value.” Historical drilling at the Rembrandt project’s Monet prospect has resulted in assays including 2m at 22.8 grams per tonne gold from 33m; 2m at 21.1gpt from 34m; and 2m at 11.2gpt from 24m. High-grade mineralisation within the prospect remains untested below 40m, with limited exploration carried out over the past seven and a half years while the project has been in private hands. Exploration is currently being planned to complete a reverse circulation program at Monet with the aim of delineating a near-surface resource amenable to open cut mining. Toll treatment from such a mine is expected to take place at nearby processing facilities. Monet is 150m from an unsealed road which connects to the Goldfields Highway, and 110km north of Kalgoorlie. Terrain shares were up 20% to 0.6c.[/table]
TMX Price at posting:
0.6¢ Sentiment: Buy Disclosure: Held
