In a strategic move, Corazon Mining has secured a deal to acquire 100% ownership of the high-grade Chalice gold project, located 50 kilometres northwest of Norseman in Western Australia, from Westgold Resources. This transformational acquisition provides the company with an established, high-grade gold system on a single granted mining lease within Western Australia's infrastructure-rich Higginsville district.
Strategic Partnership with Westgold
Major gold producer Westgold will emerge with a 19.9% strategic stake in Corazon upon completion of the deal, potentially laying the groundwork for a long-term operational partnership between the two companies. This show of support underscores the value of the Chalice project.
Deal Structure and Funding
The acquisition is funded by A$8 million in cash upfront, 47.6 million Corazon shares valued at A$6.7 million, and an additional A$11 million in deferred cash payments tied to anniversary and mineral resource expansion milestones. Corazon has also strengthened its balance sheet through a heavily supported A$16.5 million single-tranche capital raise at A$0.14 per share, leaving the company with A$12 million in cash post-completion.
Chalice Project Highlights
Chalice hosts an existing JORC 2012 mineral resource estimate of 191,000 ounces of gold at a grade of 2.74 grams per tonne (g/t). Last mined 12 years ago when the gold price averaged A$1,370 per ounce, the project was originally optimised using a conservative gold price of US$1,700 (about A$2,383) per ounce. With current spot prices around A$6,400 per ounce, Corazon sees significant upside potential for resource growth through pit shell expansions, lower cut-off sensitivities, and inclusion of previously uneconomic ounces.
Historical Production and Drill Results
Between 1995 and 1999, Chalice produced 517,000 ounces at 5.6 g/t gold from open pits and 39,000 ounces at 5.5 g/t gold from underground operations. A later campaign from 2011 to 2014 extracted an additional 89,000 ounces at 4.35 g/t gold. Historical drill intercepts indicate unmined, high-grade mineralisation remains open and untouched by modern exploration. Notable hits include 35 metres at 2.5 g/t gold from 149 metres (including 15 metres at 4.1 g/t) at the Kronos lode, 22 metres at 3 g/t gold from 524 metres at the Olympus lode, 8 metres at 8.0 g/t gold from 18 metres, and 20 metres at 2.6 g/t gold from 68 metres at the Atlas lode.
Management Commentary
Corazon Mining managing director Simon Coyle said: "The acquisition of the Chalice gold project is a genuinely transformational step for Corazon. Chalice is a proven high grade gold system that has produced nearly 650,000 ounces, and with a resource that remains open in multiple directions."
Proximity to Processing Infrastructure
Chalice sits within 130 kilometres of seven operational processing plants, including Westgold's Higginsville facility just 22 kilometres away. The plant currently processes 1.6 million tonnes per annum, with plans to expand to 2.6 million tonnes per annum.
Next Steps
Corazon plans to immediately launch an aggressive 15,000-metre drilling campaign at Chalice to test regional targets and extend known mineralisation boundaries. Initial technical studies will focus on resource re-optimisation using current gold prices. The company will also continue exploration at its Two Pools and Feather Cap gold projects in Western Australia's Gascoyne region.
With cash in the bank, a high-grade resource on a granted lease, and support from a Tier-1 producer, Corazon appears well-positioned to advance the Chalice project. Investors will be watching for rig mobilisation and drilling results.
