Musgrave Minerals sets the gold stage for a key year in 2021

Musgrave Minerals Ltd (ASX:MGV) (OTCMKTS:MGVMF) has set the stage for a key year in 2021 as it targets major high-grade systems and near-term production at its flagship Cue Gold Project in Western Australia. The company plans to undertake various exploration activities this year to systematically test targets, make discoveries and grow the project’s gold resource base. In 2021 MGV also intends to begin a pre-feasibility study (PFS) for Break of Day and Lena deposits within Cue to define a clear path to the production. At the Lake Austin JV project with Evolution Mining Ltd (ASX:EVN), Musgrave plans basement drill testing of gold targets in a bid to define a large economic gold system at this portion of the Cue Project. Drilling plans During the first, second and third quarters of the year, follow-up reverse circulation (RC) and aircore drilling of Musgrave’s new priority regional targets is planned within the Cue Project. Resource definition and conversion drilling will also be carried out throughout the year while follow-up diamond drilling is planned at high priority targets within the JV with Evolution. Resource and exploration upside The Cue Project has a large system of more than 28 kilometres of shear zone and the current resource estimate totals 659,000 ounces. With around $24 million cash in hand and zero debt, the company is well funded to carry out exploration activities in the current year. The project also represents an opportunity for further discoveries through successful regional drilling programs. Break of Day resource The company has started pre-feasibility studies at Break of Day deposit, where just five loads host 85% of the current resource. Additional drilling on the newly discovered White Light lode is ongoing and shallow oxide infill RC drilling on the Twilight and Velvet lodes has started. Re-interpretation of the geological model demonstrates the potential for repetitions of the existing resource lodes. Musgrave’s activities to upgrade the resource estimates are focusing more on near-surface high-grade ounces. Current resources stand at 797,000 tonnes at 10.2 g/t gold for 262,000 ounces while the potential high-margin open-cut subject to feasibility includes Starlight & White Light with 360,000 tonnes at 13.9 g/t of which Starlight hosts 240,000 tonnes at 17 g/t for 131,000 ounces from 3 metres below the surface. The most recent resource estimate increased overall gold grade by 42% on the 2017 estimate while indicated resources increased 58% and contained ounces 31%. Other resources The Lena deposit hosts a resource of 4.305 million tonnes at 2.3 g/t for 325,000 ounces. There are also 8,000 ounces at the Leviticus deposit and another 22,000 ounces at Numbers taking overall Southern Area resources to 617,000 ounces. The remaining Cue project resources are from the Northern Area where Hollandaire and Rapier South host 17,000 ounces and Jasper Queen and Gilt Edge 24,000 ounces. Strong gold recoveries Recoveries of 96-99% recoverable gold from conventional gravity and CIL processing have been achieved from metallurgical test-work at Break of Day and Lena. Both deposits recorded high gravity recoveries of more than 70% in fresh rock, which is comparable to typical Yilgarn gold ores, suggesting low reagent use and reduced processing costs. Work at JV Musgrave has entered into an earn-in and exploration joint venture with Evolution Mining over the Lake Austin portion of the Cue Project. Under the JV, Evolution can spend up to $18 million in the next five years to earn 75% interest in the project with a commitment to invest a minimum of $4 million in the first two years. The company has identified multiple new high priority gold targets under variable thickness dune and lake cover. Basement gold intercepts from Lake Austin North include: 84 metres at 1.7 g/t gold including 20 metres at 6.1 g/t; 94 metres at 2.2 g/t including 29 metres at 5.1 g/t; and 242 metres at 1 g/t including 45 metres at 3.3 g/t.