Legacy Iron Ore, the Australian subsidiary of iron ore miner NMDC, has signed an indicative term sheet with Ling prospecting syndicate to acquire stake in Yundamindera gold project situated in the western part of the country.
The contiguous package of gold tenements or Yundamindera project is located about 30 kms North-west of Legacy's Mt Celia gold project, Legacy said in a statement.
The region is highly prospective with the world class Sunrise Dam, Wallaby and Sunrise Dam gold mines located about 20-30 kms to the East and North-east, having total resources of about 20 million ounces.
For acquiring interest in the gold tenements, Legacy has conducted due diligence to its satisfaction and is moving towards completing contractual arrangements and gaining all necessary approvals, the company said.
"Under the terms of the Term Sheet, Legacy Iron or (its) nominee can earn a staged interest in the project area by committing exploration funds of AUD 1,50,000 and a further AUD 2,50,000 to earn a 60 per cent and 80 per cent interest respectively," it added.
Indian government-owned NMDC currently holds 49.6 per cent stake in Legacy Iron Ore. The Indian iron ore miner had acquired 50 per cent stake in the Legacy in 2011 for about AUD 18.89 million and is using the Australian firm as a platform for its overseas ventures.
Last month, Legacy had cancelled its AUD 25 million rights issue citing 'weak market' conditions.
"Of major interest to Legacy Iron is the White Quartz Hill gold prospect. The prospect takes the form of a large broad hill topped by a 300 meter white quartz reef," Legacy said.
According to the Australian firm, the white quartz reef has little gold mineralisation but there are several other sets of narrow quartz veining which contain strong visible gold.
"There has been no historic workings on this prominent hill and no drilling to date," it said, adding that the high grade quartz veins, structural complexity and widespread alteration all indicate an excellent potential for defining a significant gold resource.
A heritage clearance has already been received for the prospect area, and drilling is programmed to commence upon completion of mapping and statutory approval, the company further said.
