THE share price of Wabag gold and precious metals explorer Gold Mountain Ltd has spiked over the past few months on the back of a run of positive news, including the discovery of visible gold in a trenching programme at its “flagship” Crown Ridge project.
In early September the ASX-listed company confirmed it had encountered visible gold and platinum in its initial 92 metres of trenching at Crown Ridge, whilst investigating a number of magnetic anomalies identified by ground magnetic surveying in 2015.
The ongoing programme has seen 14 trenches, totalling 92 m in length, excavated to depths ranging from two metres to four metres in the Crown Ridge Exploration Licence EL1968.
Gold Mountain reported that samples from the base of the trenches were panned to detect the presence of visible free gold with all panned concentrates containing high proportions of magnetite and other heavy ferro-magnesium minerals.
The company said a cluster of trenches located to the north-west of the Crown Ridge camp all contained visible gold in panned concentrates.
Gold Mountain director of Exploration, Matthew Morgan, said the trenching results have helped reinforces the developing model of gold mineralisation associated with fractures of the rim of the volcanic crater at Crown Ridge.
“The Crown Ridge project is continuing to produce high quality, anomalous results. We are greatly encouraged by the recovery of free gold from trenches that are only several metres deep and in a very preliminary stage. We are also further encouraged by the presence of platinum mineralisation from parts of EL1968,” Mr Morgan said.
“These results, although only preliminary, justify the company’s decision to continue the ongoing trenching programme and extensive Helicopter-borne magnetic surveying into what we believe is the highly prospective EL2306, to fully explore the other half of the interpreted Crown Ridge diatreme structure.”
The positive exploration news followed a number of corporate successes for Gold Mountain – starting with the successful raising of A$2.3 million in August.
Funds from that share allocation will mainly be utilised to continue to fast track exploration at Crown Ridge, including a proposed drill programme set to commence in December 2016.
Gold Mountain director, Tony Teng, said the share placement had attracted a number of new investors onto the company’s books.
“Our new shareholders are very committed to the company’s growth, and like the GMN Board, they recognise that Crown Ridge holds significant unlocked value.
“We are fortunate to have an excellent dialogue with landowner groups in and around the project, and that Crown Ridge can be accessed easily by road, ensuring lower exploration costs.”
Gold Mountain’s faith in PNG and Crown Ridge’s golden potential was demonstrated in August when the company completed the acquisition of an additional 50% interest in PNG project company Viva No. 20 Limited and moved to buy a large tenement holding adjacent to its flagship project from another party.
Gold Mountain had initially acquired a 20% interest in Viva, which has been granted three exploration licences including one which hosts Crown Ridge, in March by issuing 50 million shares to Viva shareholders at A$0.03 each.
To move to a 70% interest in Viva, Gold Mountain has issued an additional 60 million of its shares at A$0.08 per share to Viva shareholders.
Shortly after completing the second tranche Viva acquisition, Gold Mountain announced it had signed an exclusive dealing agreement with the owner of the highly prospective EL2306 tenement, which adjoins flagship Crown Ridge gold project.
The company is now working to enter into a binding acquisition agreement.
Gold Mountain said that under the PNG Mining Act, completion of the acquisition can only take place after December 14, 2017 being the second anniversary of the registration of EL2306. Should the company proceed to acquire EL2306, on completion of the acquisition the company’s total tenement area in the Wabag Mineral province will be ~1,169km2.
Exploration director Matthew Morgan said the addition of EL2306 would be a significant milestone for the company.
“This would allow Gold Mountain 100% exploration access to the highly prospective Crown Ridge diatreme structure.
“The crater that hosts the Crown Ridge project is approximately 3.8km long by 2.2km wide and fully encompasses the headwaters to the Timun River. As such, we are confident that the exploration of EL2306 would bring us a step closer to narrowing down the potential hard rock source of the productive Timun River alluvial gold field, located immediately downstream from Crown Ridge.”