Riversgold Ltd will use $1.85 million from a placement to professional and sophisticated investors to accelerate exploration drilling efforts on the Northern Zone Gold Project which is just 25 kilometres east of Kalgoorlie in Western Australia.
Funds in part will be used by the company to begin a drill program designed to build a JORC-compliant mineral resource estimate.
This will be aimed at converting the large conceptual exploration target of 200 million to 250 million tonnes at a grade of 0.4 g/t to 0.6 g/t gold for 2.5 million to 4.8 million ounces of gold.
“Solid cash position”
RGL’s chairman David Lenigas said: “This strategic funding puts RGL into a solid cash position going forward and allows the company to start finalising fast track drilling plans for the Northern Zone Gold Project, located just to the east of Kalgoorlie.
"As announced on April 16, 2024, we have a very large gold exploration target here, centred on a large porphyry gold system and we have been putting plans together to get drilling here in earnest.
"The project is now drill-ready and we are hoping to have drills turning on the project in the coming weeks.
"Our prime exploration objective here is to publish maiden JORC gold numbers and build on those numbers with follow-up step-out drilling.”
Previous results
On May 9, 2023, RGL announced the 80% earn-in to the Northern Zone Gold Project with London-listed Oracle (NYSE:ORCL) Power Plc.
RGL undertook a 4-hole diamond drill program for 1,379 metres to specifically test the exploration model of +100-metre-wide gold mineralisation.
This drilling was completed on August 21, 2023, and the core was sent to ALS in Perth for core photographs, cutting and assaying.
The assay results and interpretation of those results confirmed the original mineralisation model, style, widths and grades.
Some of the significant results from 2023 and 2021 drilling confirmation programs include:
- 330 metres at 0.49 g/t gold from 30 metres;
- 110 metres at 0.60 g/t from 208 metres;
- 154 metres at 0.58 g/t from 98 metres; and
- 66 metres at 0.89 g/t from 30 metres.
Drilling plans
Located 175 kilometres north of Northern Zone, Saturn Metals has released a Preliminary Economic Assessment (PEA) on the Apollo Hill Gold Project that has a resource of 105 million tonnes at 0.54 g/t for 1.839 million ounces.
RGL views the Apollo Hill Project as an example of what it is looking to achieve at Northern Zone, albeit with Northern Zone being a potentially larger project.
Conceptually, the company sees similarities between Northern Zone and Saturn's Apollo Hill Project based on the information in the PEA statement of a potential large low-grade heap leach operation.
The company is making plans to begin the next phase of drilling at Northern Zone to follow up the previous encouraging results with the gold hosted in a diamond drill confirmed +100-metre-wide porphyry.
Placement details
The placement to sophisticated and professional investors will be undertaken in two tranches with a total of 336,363,636 shares to be issued at $0.0055 per share (to raise $1.85 million, before costs.
There will be 241,915,363 new shares issued under a first tranche utilising the company’s existing placement capacity under ASX Listing Rules 7.1 and 7.1A capacities with settlement expected to occur on Wednesday, May 15, 2024, with allotment on Thursday, May 16, 2024.
The company will also seek shareholder approval for the issue of 94,448,273 new shares under a second tranche with a meeting expected to be convened in late June 2024.
Shareholder approval will also be sought to issue 40 million unquoted options exercisable at $0.01 each and with a 3-year term to executive chairman David Lenigas and 20 million options to each of non-executive directors Simon Andrew and Ed Mead.