Collinsville strikes gold over potential mining project
COLLINSVILLE could be screaming Eureka soon as a mining company explores gold deposits only 10kms away from the town.
Mining company, Evolution Mining, who operate the Mt Carlton Gold Mine located approximately 35kms northwest of Collinsville, has entered into an earn-in agreement with private entity Basin Gold over a potential project at Crush Creek.
Located approximately 10km northwest of Collinsville, the project is currently in the intermediate stages of exploration, with approximately 300 shallow holes drilled to an average depth of 70 metres.
In a statement from Evolution Mining, the company said that If the exploration is successful the Crush Creek site has 'significant potential to provide mine life extensions' at their Mt Carlton site.
It is understood that the product from the site would be transported to the Mt Carlton site where it would then be processed.
Evolution Mining vice-president of discovery and business development, Glen Masterman, said the initial works showed there was a high level of potential gold deposits in the area.
"Work completed by our partner Basin Gold indicates Crush Creek is a low-sulfidation epithermal target which contains mineralisation amenable to treatment through the processing facility at Mt Carlton," he said.
"We expect to begin our first drill program at Crush Creek early next year which will give us a better idea of the scale and potential of the project."
The Crush Creek agreement will see Evolution Mining make an initial cash payment to Basin Gold of $2m at the grant of a Mineral Development Licence.
Evolution Mining will earn a 70 per cent interest in the project by providing $7 million of exploration expenditure over a two-year period.
Once the earn-in is met, either party has the option to elect for Basin Gold's 30 per cent interest to be sold to Evolution Mining for $4.5 million and a 10 per cent net profit interest on any production above 100koz of gold.