(MENAFN - ProactiveInvestors - Australia) Perth based De Grey Mining (ASX: DEG) has dialled in to the New Zealand precious metals sector after signing a definitive agreement with Waihi Gold Company Ltd to acquire 100% of the Puhipuhi Project - located on the North Island.
Waihi is a subsidiary of Newmont Mining (NYSE: NEM). The project comprises one exploration permit that was granted to Waihi in 2009 and has a term of 5 years, with the right to a further 5 year extension available.
The project is prospective for gold / silver, with previous drilling discovering: 18 metres at 3.38g/t gold and 10.3g/t silver, including 2 metres at 17g/t gold and 15g/t silver; and 2 metres at 7.6g/t gold and 70g/t silver.
De Grey has already completed its due diligence over the project, and has applied to the New Zealand government for a transfer of ownership for the permit - with De Grey to pay A100,000 to Newmont for a 100% interest in the project.
Newmont will retain an economic interest in the project by retaining a 2% Net Smelter Royalty on any minerals mined.
The New Zealand exposure will add to De Grey's current Australian and Argentinian focused project portfolio.
Priority targets drill ready
De Grey can hit the exploration trail running with the acquisition having nine high priority drill ready target areas, based on geophysics and geochemistry.
The Northern silver workings have not been explored despite 1.35g/t gold and 304g/t silver sampling reported in historical exploration, with another plus for the project is the general low sulphidation epithermal mineralisation in the country.
Despite exploration commencing in the early 1980s by companies such as Homestake, BHP and Macraes, the Project remains relatively underexplored.
Of the 50 drillholes completed within the Project area, 18 are less than 100m in length, 28 between 100 and 200 metres length and only 4 greater than 200 metres in length in what has been interpreted from petrology, geochemistry, mapping and geophysics to be the top of an epithermal system.
The potential for Puhipuhi to host such a fissure vein system has been recognised by several explorers during the last 30 years, however drilling to date has only been relatively shallow, and hasn't tested the deeper parts of the system where the gold-silver mineralisation is expected to occur.
Other drill targets generated from multi-element surface geochemistry and ground based geophysical surveys (IP and CSAMT) also remain untested within the project area.