Both companies agreed to the SAA back in February 2017. The goal of the alliance is to develop high-potential exploration opportunities here in Australia and abroad.
Ausquest does the exploratory work while South32 supplies the money to advance the projects.
South32 can earn up to 70% interest in each project by spending US$4.5 million (around AU$6.4 million) on exploration, and can up its stake to 80% by completing pre-feasibility studies.
Ausquest and South32 included the Gunanya Project in the SSA quite recently, on 30 June.
About the Gunanya Project
The Gunanya Project is located in the Paterson region, in Western Australia. Both companies are looking to target large-scale gold and copper discoveries, like Rio Tinto Ltd [ASX:RIO] did with its Winu project and Newcrest Mining Ltd [ASX:NCM] did at Havieron.
The companies have agreed on a reverse circulation (RC) drilling program of six to nine drill holes, at 1,800 metres, to test three targets defined by magnetics.
According to modelling, the targets are at shallow depth — between 50 to 100 metres. They are also large in size — up to one kilometre wide and extending over strike lengths ranging from one to five kilometres. They are planning a minimum of two RC drill holes, separated by 200 metres, over each of the three targets. Depending on the results, they will carry out more drilling. They expect drill holes to be 200 metres deep.
According to Ausquest Managing Director Graeme Drew, ‘drilling is the ultimate test of any target, and we are excited to be able to drill early in the exploration process at Gunanya.’
Ausquest has heritage clearance surveys for 19 drill sites, planned for late August. Depending on when they receive clearances and drill availability, the company is planning to drill between September and October.
Ausquest shares have shot up 40%, at time of writing. While the South32 share price is trading close to 0.5% lower than yesterday.
With gold trading at over US$1,800, the metal is attracting a lot of attention. One way to get exposure to gold is through physical gold. Another is through gold companies.
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