TORONTO, Aug. 7, 2020 /CNW/ – Karora Resources Inc. (TSX: KRR) (“Karora” or the “Corporation”) is pleased to announce that following an extensive due diligence period, it has closed the acquisition of the Spargos Reward Gold Project (“Spargos Reward Project” or “Spargos”) from Corona Resources Limited as originally announced on May 11, 2020 (see related press release). The Spargos Gold Project contains a historical JORC1 (2012) Mineral Resource Estimate of 112,000 oz (785,800 tonnes @ 4.4 g/t) indicated resource and 19,000 oz (151,000 tonnes @ 4.0 g/t) inferred resource2, as detailed in Table 1 below.
Note: A qualified person has not done sufficient work on behalf of Karora to classify the historical estimate noted in Table 1 below as current mineral resources or mineral reserves, and Karora is not treating the historical estimates as current mineral resources or mineral reserves.
“The Spargos Reward Project is an excellent bolt-on project for our Higginsville gold operation (“HGO”) and a great addition to our already strong asset base in Western Australia, providing a new high-grade source of feed just 65km from the HGO mill. We intend to fast track Spargos into our growing production pipeline with the goal of beginning to generate cash flow from the Project in 2021. Follow up is planned on the exciting exploration upside potential at Spargos, as demonstrated by RC drillhole 19SPRRC004 intersection of 37.1 g/t over 18m (62m to 80m), including 93.1 g/t over 2m from 78m downhole3,4.”
Paul Andre Huet, Chairman and CEO
Karora has acquired the Spargos Reward Project for A$4 million in cash and will be subject to a minimum spending commitment of A$2.5 million on exploration and development over a two-year period from the closing date. The seller is entitled to an additional (i) A$1.5 million in Karora shares on commencement of gold production from Spargos, and (ii) A$1.0 million in Karora shares if a new additional indicated gold resource of at least 165,000 oz is delineated at the project.
The Spargos Reward project tenements cover 33 km2 located in the Eastern Goldfields of Western Australia, 35 minutes by road to HGO. On top of the existing historical resource, there are a number of historic workings within the project, the most notable of which is the historic Spargos Reward Gold Mine which produced 105,397 tonnes at an average grade of 8.56 g/t Au in the 1930s and 1940s1, with limited gold extraction since that time.
Table 1: Spargos Reward Historical Mineral Resource Estimate February 26, 2020 (JORC Code 2012)1,2
|Lower cut-off||1.0 g/t Au|
|BELOW 300m RL||Thousand|
|Lower cut-off||2.0 g/t Au|
1. As per the 2012 JORC (Joint Ore Reserves Committee) Code.
The information is extracted from the report entitled ‘Resource Estimate Update for Spargos Reward Project Eastern Goldfields Western Australia’ dated on February 26, 2020 and is available to view on Corona Resources Limited’s website (www.coronaresources.com.au). Karora confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original report. A qualified person has not done sufficient work on behalf of Karora to classify the historical estimate noted here and in Table 1 as current mineral resources or mineral reserves and Karora is not treating the historical estimates as current mineral resources or mineral reserves. There is no certainty they will prove to be accurate or that a range of outcomes will be achieved.
2. The historical mineral resource is estimated at variable cut-off grades: >1.0 g/t Au for open-cut mining (above the 300m RL) and >2.0 g/t Au for underground mining (below the 300m RL). The cut-off grades reflect the different mining costs for each mining method.
3. Historical drill information for hole 19SPRRC004, as provided in Corona Resources Limited news release (www.coronaresources.com.au), December 6, 2019:
Table 2: Historical drill Results, 19SPRRC004, December 6, 2019
Table 3: Drill Location SPRRC004, December 6, 2019
4. Downhole thickness. True thickness cannot be estimated with available information.
For More Information on Spargos reward, visit http://www.coronaresources.com.au/spargos-reward-project/