AUSTRALIAN minerals explorer Gold Mountain has increased its stake in the Wabag gold project, situated in Papua New Guinea’s Enga province, in a cash and scrip deal worth A$4.95 million.

The company will acquire a 50 per cent interest in PNG-based Viva No. 20 through the issue of 60 million new shares at 8 cents each to Viva shareholders, as well as a A$150,000 cash payment.

This takes the company stake in Viva to 70% after Gold Mountain, then known as Commissioners Gold, signed a deal with Viva to take a 20 per cent stake in the company in June last year.

In a statement, Gold Mountain said it expected the acquisition of both interests would be finalised shortly after 28 November this year, adding that it would update shareholders about the acquisitions in due course.

The Wabag exploration licences – EL 1966, EL 1967 and EL 1968 – are located immediately north west of the Wabag township, in turn located 75 kilometres north west of Mt Hagen, and 25 kilometres from the nearest airfield.

Previous exploration over the project area has identified gold and platinum anomalies in stream sediments, most noticeably in the Timun River area of EL 1968, where historic production of around 100 kilograms of gold and 3.5 kilograms of platinum has been recorded from alluvial mining operations since 1948.

Artisanal gold mining is currently being undertake in several locations within the Wabag project area, Gold Mountain said.

Stage two sampling results from within the Crown Ridge prospect project area in EL 1968 found highly anomalous gold values in stream sediment samples collected from creeks draining the prospect area, with gold also found in float samples of quartz veins on the project area.