Kula Gold Limited is pleased to announce the acquisition of mining lease M77/0406 and exploration leases E77/2210, E77/2423 & E77/2668 – The Mt Palmer Gold Mine – located near Marvel Loch WA in the Southern Cross Goldfields.
Kula’s Managing Director Ric Dawson comments:
“This acquisition is in alignment with the Company’s strategy to add assets near to existing operations to fast track any discovery to monetary success. This historical rich ‘half ounce’ gold mine has huge potential of high-grade gold and is a priority drilling target for Kula.”
Aerial view of the Mt Palmer Gold Project
HIGHLIGHTS
- Kula to acquire the historic Mt Palmer Gold Mine last commercially mined in 1944 down to only the 6th Level (~160m) at 15.9 grams/tonne
- This acquisition adds to Kula’s Marvel Loch Project with multiple gold prospects
- Significant opportunity to discover additional high-grade gold mineralisation
- Being just 15km from the Marvel Loch gold processing plant and infrastructure, aligns with Kula’s strategy of exploring near to existing operations to fast track any discovery to monetary success
- Indications of Lithium and Rare Earth Elements (REE) in the greater Southern Cross region will provide the concepts to be analysed in addition to gold similar to the existing Wesfarmers’ Mt Holland Lithium Project
- Kula to raise $1,210,000 via a placement to professional and sophisticated investors
Figure 1: Kula’s Marvel Loch Projects (noting that Marvel Loch Mine, Nevoria Mine, Yellowdine North and Yilgarn Star are not assets of Kula*).
* Publicly available historical gold production or current resources of other parties:
Project – Historic Production – Past Production – Current Owner
Marvel Loch – 3m oz 1905 -2019 – St. Barbara – Hanking Gold Mining
Nevoria – 600,000 oz 1917 -2013 – Sons of Gwalia – Hanking Gold Mining
Yilgarn Star – +2m oz 1991 -1996 – Gasgoyne Gold – Hanking Gold Mining
About Mt Palmer Gold Mine
The mine produced over 150,000 ounces of gold at 15.9 grams/tonne in the period 1934 to 1944 and is north of the Nevoria Gold Mine (+600,000 ounces of gold), east of the circa 2.4million ounce Marvel Loch Gold Mine.
The mine closed in part due to the continuation of World War 2 severely restricting access to labour and materials and subsequently the mine flooded and never reopened.
Geology and Mineralisation
Mt Palmer Gold Mine is in the central area of the Southern Cross Greenstone Belt.
The Southern Cross Greenstone Belt is a strongly deformed, metamorphosed synformal remnant of a once larger greenstone assemblage.
It has been shaped and attenuated by the emplacement of syn-tectonic granitoids include the Ghooli, Parker, and Rankin domes.
The historical gold workings at Mt Palmer Gold Mine are hosted within an amphibolite sequence that extends from the greenstone-granite contact located approximately 400m to the west of the mine and a thin Banded Iron Formation trending north-northeast located 200m east of the mine.
Outcrop within the project area is restricted predominantly to the area of exposed mine workings.
Elsewhere, the surface is covered by transported soil and colluvial material derived mainly from quartz blows and pegmatite.
Outcrop is obscured to the south by the remnant mine tailings dump and lake sediments that cover the southeastern half of the tenement.
Historic gold production was from a shallow open-pit and underground workings that were developed on two shoots, the Main Lode and East Lode, and the smaller West Lode and New Lode that are positioned to the west of the main shaft.
The Main and East Lodes plunge south and north respectively on the limbs of a north-plunging synform. Historic sections and level plans clearly show the folded nature of the ore-horizon (Figure 2).
Gold mineralisation is hosted by quartz veins in folded and sheared tholeiitic basalt.
Figure 2: Mt Palmer Gold Mine- Historical Traverse Section at 170ft South.
Mining records indicate that the high-grade shoots were developed within stratabound veins on the limbs and closures of pre-existing folds. Individual lodes were mined over a strike length extending up to 200m and to depths of 155m below surface. The shoots are up to 10m wide and 30 to 70m long and were best developed in the Main and East Lobes.
The mine lease and surrounding areas are considered to have good exploration potential for the discovery of additional high-grade shoots.
The shear zones were reported as zones of complex deformation with strongly developed foliation and quartz-carbonate veining. None are well exposed at surface.
Mining records indicate that the high-grade shoots were developed within stratabound veins on the limbs and closures of pre-existing folds. Individual lodes were mined over a strike length extending up to 200m and to depths of 155m below surface. The shoots are up to 10m wide and 30 to 70m long and were best developed in the Main and East Lobes.
The mine lease and surrounding areas are considered to have good exploration potential for the discovery of additional high-grade shoots.
The shear zones were reported as zones of complex deformation with strongly developed foliation and quartz-carbonate veining. None are well exposed at surface.
Some amphibolite rocks within the shear zones have been altered to biotite schist and the gold bearing quartz veins within the shear zones are weakly sulphidic. Gold was said to be associated with pyrite-arsenopyrite and/or chalcopyrite-pyrrhotite mineralisation.
Mine workings on the Main Lode comprise an open pit to a depth of about 20m and underground drives and stopes down to the 4th Level at 90m depth. Some stopes were up to 10m wide but were generally between 2m and 5m wide. The lode strikes N-S over most of its length and dips steeply to the east. It was mined over a strike length of about 200m. Mine records show that within the broader lode, a small high-grade shoot which plunges to the south at 40 to 50 degrees is coincident with thickened parasitic fold on the east limb. The Main Lode was best developed between 15 and 60m vertical depth (Levels 1 and 3) and widest at approximately 30m vertical depth (Level 2).
The East Lode was discovered following underground drilling from the Main Lode workings, and subsequently developed over six levels to a total vertical depth of approximately 155m. Stopes were from 2 to 10m wide and generally around 5m wide. The lode strikes NNE and dips steeply to the west. The best mineralisation is developed around a parasitic fold on the eastern limb of a north-plunging synform, and close to the closure of this structure (Figure 3). The lode was mined to surface in a steeply north-plunging shoot but in the deeper levels the plunge flattens markedly as it tracks northward along the closure of the synform. At the cessation of mining on the 6th Level the shoot was becoming sub-horizontal.
West Lode and New Lode are linked by development from the Mt Palmer shaft at the 2nd Level. The New Lode consists of two lodes approximately 10m apart, which have been interpreted to form an anticlinal fold closure close to the present-day land surface. The fold is interpreted to plunge to the north. The New Lode has been mined over a strike length of 50m to a depth of 30m. The stopes are 2-3m wide and open to the surface. The lodes strike NNE and NE and both dip steeply to the east. The open pit is inaccessible due to steep walls and unstable ground and the stopes below the pit floor are filled with water.
The West Lode was mined over a strike length of about 40m to a depth of 30m. The reported stopes are about 2m wide but do not reach the surface as the lode is reported to have pinched out 5m below surface. The lode strikes N-S but swings to the SW at its southern end and dips steeply to the east.
Historical exploration programmes at Mt Palmer Gold Mine were focused on gold mineralisation. The drilling database notes numerous parallel pegmatite intersections of up to 50m thickness that have never been assayed for lithium.
Figure 3: Mt Palmer Gold Mine-Historical Long Section with face samples (refer Appendix B & C- drive plans).
Figure 4: Mt Palmer Gold Mine- Level 1 opening in west wall of Main Lode open pit
Placement Details
The placement to raise $1,210,000 before costs is to be undertaken at an issue price of $0.01 per share, representing the Company’s last traded price on Friday 24th May 2024 (“Placement”).
72,969,288 fully paid ordinary shares will be issued under the Company’s existing ASX Listing Rule 7.1 and 48,030,712 fully paid ordinary shares will be issued under the Company’s existing ASX Listing Rule 7.1A capacities without shareholder approval. Settlement is expected to occur on or around Wednesday 5th June 2024 with allotment to occur on or around Thursday 6th June 2024.
Funds raised from the Placement will be applied toward the acquisition of the Mt Palmer Gold Mine, a drilling programme at the Mt Palmer Gold Mine and for working capital.
The Lead Manager to the Placement will receive a 6% capital raising fee (plus GST) and, subject to shareholder approval at an upcoming General Meeting, 10,000,000 unlisted broker options exercisable at $0.015 on or before 31 May 2027.
Additional Gold Prospects
The Kula team is continuing to further develop existing gold prospects in the Marvel Loch Project; Boomerang Prospect, Stingray Prospect, Crayfish Prospect, Nevoria North Prospect and G-Star Prospect.
Results from the recent RC drilling programme (gold and multi-element) will be reported in due course.
Acquisition Terms
Kula has entered into a binding terms sheet (“Agreement”) with Aurumin Limited (“Aurumin”) (ACN 639 427 099), an unrelated Australian public listed company (ASX: AUN) that holds the Mt Palmer Gold Mine.
The terms of the Agreement are as follows:
- Kula to acquire a 51% interest in the Mt Palmer Gold Mine, tenements M77/0406, E77/2210, E77/2423 & E77/2668 (“Tenements”) and mining information.
- Kula can earn-in to acquire a further 29% in the Tenements and mining information by incurring exploration expenditure of $1m for a period of up to 3 years. Aurumin has, in the event Kula does not earn the additional 29% interest, the right to purchase back a 2% interest in the Tenements and mining information (so as to hold 51% interest).
- Thereafter Kula & Aurumin contribute on a prorated basis or Aurumin dilutes. Aurumin’s equity position converts to a 1% net smelter royalty if diluted to less than 10%.
- The acquisition is conditional upon the following being satisfied by no later than 30 June 2024:
- Kula completing due diligence to its satisfaction;
- Kula obtaining all approvals under the Listing Rules for the acquisition;
- Kula to:
- pay $150,000 for Aurumin’s geological database for the Tenements and regional area; and
- $100,000 for a 51% interest in the Tenements (“Consideration”). The Consideration, at Kula’s election, can be paid in cash or fully paid ordinary shares in the Company (“Kula Shares”) at an issue price equal to $0.01 or the Volume Weighted Average Market Price for Kula Shares over the 10 trading days in Kula Shares immediately prior to Completion.
- the term sheet contains warranties typical for a transaction of this nature.
Appendix A
Appendix A: Kula Gold’s Marvel Loch, Southern Cross, Rankin Dome and Westonia Projects, location of regional gold mines (Edna May, Marvel Loch Mine, Nevoria Mine, Yellowdine North, Yilgarn Star, Split Rocks and Mt Holland Lithium Mine are not assets of Kula*) and pre-existing infrastructure
Appendix B
Historical Long Section- ca. 1945 with face sample gold results, (~1.5m apart)
Historical face samples have been convert from imperial to metric measurements, ie feet to metres, and pennyweights to grams/tonne for this plan.
Appendix C Table of Historical Face Samples (Significant Results > 5g/t Gold) – see PDF
References:
ASX Release – Mt Palmer Exploration Update – 20 October 2021
WAMEX Report – A93834
WAMEX Report – A93844
BOOMERANG DEPOSIT
ASX Release – Boomerang Kaolin Deposit- Maiden JORC Resources – 20 July 2022
Kula Gold confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements, and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcements.
Competent Person Statement
The information in this announcement that relates to geology, exploration and visual estimates is based on, and fairly represents, information and supporting documentation compiled by Mr. Ric Dawson, a Competent Person who is a member of the Australian Institute of Mining and Metallurgy. Mr. Dawson is a Geology and Exploration Consultant who has been engaged by Kula Gold Limited and is a related party of the Company. Mr. Dawson has sufficient experience, which is relevant to the style of mineralisation, geology and type of deposit under consideration and to the activity being undertaken to qualify as a competent person under the 2012 edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (the 2012 JORC Code). This market announcement is issued with the prior written consent of Mr. Dawson as to the form and context in which the exploration results, visual estimates and the supporting documentation are presented in the market announcement.
News Release
Date: 31 May 2024 | ASX Code: KGD
About the Company
Kula Gold Limited (ASX: KGD) is a Western Australian mineral exploration company with expertise in the discovery of new mineral deposits in WA. The strategy is via large land positions and structural geological settings capable of hosting ~+1m oz gold or equivalent sized deposits including Lithium.
The Company is advancing projects within the WA goldfields at the Boomerang Gold Prospect and Mt Palmer Gold Project at Marvel Loch Southern Cross, the South West region of WA for Lithium and Gold at Kirup and Brunswick – near the world class Greenbushes Lithium Mine, as well Lithium at the Taliah-Nadia-Sasha Prospects at Southern Cross, and Gold and PGE at Westonia (adjacent to the producing Edna May Gold Mine – owned by ASX:RMS).
Kula discovered the large 93.3mt Boomerang Kaolin deposit near Southern Cross WA – Maiden resource announced 20 July 2022. This project is in the economic study phase and moving to PE funding or trade JV.
The Company has a history of large resource discoveries with its foundation being the Woodlark Island Gold project in PNG, (+1m oz Gold) which was subsequently joint ventured and sold to (ASX: GPR).
Contact the Company Secretary for more information – +61(08) 6144 0592 or cosec@kulagold.com.au
