Under the terms, Traka’s free carried 20% interest in the Mt Cattlin North tenements will be exchanged for 100% of the gold rights and other mineral potential (excluding pegmatites).
The new agreement dissolves the previous Mt Cattlin North joint venture with Galaxy and gives Traka the ability to acquire mining leases over future gold production areas.
Should such an acquisition occur, Galaxy’s pegmatite rights will not be affected.
The North tenements have a strong history of gold mining and exploration and after decades of inactivity, now represent an “excellent” advanced project for Traka.
“What was originally turn-of-the-century prospector-scale activity on 18 separate mines has, with modern day exploration and improved gold prices, become a rare opportunity for substantial up-scale,” the company said.
“There are kilometre-long mineralised shear zones and quartz-veined intrusives with high grade gold shoots and numerous drillhole intersections which present [us with] targets for immediate follow-up.”
Traka acquired the tenements in 2004 and recommenced exploration for gold at the Maori Queen and Sirdar mines following historical work by Metana Minerals NL in the 1980s.
Best results at Maori Queen included 2m at 24.5 grams per tonne gold and 2m at 5.48g/t gold, while Sirdar returned 2m at 7.0g/t gold, 1m at 131.2g/t gold, and 11m at 2.5g/t gold.
While Traka has previously confirmed the “excellent scope” of the project, a gold price hovering around US$400 made it a marginal opportunity at the time.
With the gold price now much higher, the opportunity has been substantially improved.
Traka will employ high-resolution aeromagnetics and powerful electrical geophysical techniques to assist with highlighting priority positions ahead of further drilling.
Modern exploration has also recognised that some of the gold on the project is associated with quartz stockwork veined intrusives rather than shear zones, providing scope for thicker and larger tonnage targets.
This geological setting has been established at Sirdar, which sits on a single narrow steep-dipping high-grade quartz vein but has the bulk of its mineralisation in a mafic intrusive.
Traka’s exploration will be funded by a $127,500 grant under the WA Government’s Exploration Incentive Scheme.
In early morning trade, shares in Traka were up 240% to $0.034, while Galaxy Resources were up 0.50% to $1.00.