Crackerbox Acquisition Poses Execution Risks Despite High-Grade Historic Drilling
Rincon Resources has secured an option to acquire the Crackerbox Gold Project in Western Australia, a site rich in historical gold and copper mineralisation with promising drill results. The company plans to leverage extensive past exploration data to define a significant resource.
- Option to acquire 100% of Crackerbox Gold Project near Meekatharra
- Project hosts two mineralised shear zones over 19km strike length
- Historic drilling includes high-grade intercepts up to 12.7g/t Au
- Acquisition involves $50,000 option fee, $300,000 cash, 23 million shares, and 1% royalty
- Proximity to existing processing facilities offers toll or standalone plant potential
Strategic Acquisition in a Proven Gold Belt
Rincon Resources Limited (ASX – RCR) has taken a significant step by securing an option to acquire 100% of the Crackerbox Gold Project, located approximately 90 kilometres north of Meekatharra in Western Australia's prolific Murchison Goldfield. This acquisition positions Rincon within a highly prospective Archean greenstone belt known for hosting substantial gold mineralisation.
The Crackerbox project spans two mineralised shear zones, collectively extending over a 19-kilometre strike length within the Mt Maitland Greenstone Belt. This geological setting is notable for its complex faulting and folding, which historically has created favourable conditions for gold and copper deposits.
Historical Data Highlights Potential
Exploration dating back to the late 1800s and more recent drilling campaigns have revealed encouraging results. Noteworthy intercepts include 13 metres at 2.53 grams per tonne gold from 9 metres depth, featuring a high-grade 6-metre section at 6.6 grams per tonne, and other intervals such as 7 metres at 3.3 grams per tonne gold. Rock chip samples have returned exceptional grades, with values up to 62 grams per tonne gold and 8.8% copper, underscoring the project's rich mineralisation potential.
Despite this, much of the project remains underexplored, with six walk-up drill targets identified and multiple untested historic prospects. The mineralisation remains open along strike and at depth, suggesting substantial upside for resource expansion.
Acquisition Terms and Strategic Outlook
Rincon's option agreement includes a $50,000 fee to secure exclusivity for 60 days, followed by a $300,000 cash payment and the issuance of 23 million fully paid ordinary shares upon exercising the option. Additionally, a 1% net smelter royalty will apply to the tenements. The company is currently conducting detailed due diligence and compiling historical data to inform upcoming exploration activities.
Importantly, the Crackerbox project is situated just 51 kilometres from WestGold Resources' Fortnum Gold Project, offering potential synergies such as toll processing arrangements. Should exploration confirm a significant resource, Rincon could also consider developing a standalone processing facility, enhancing project economics.
Looking Ahead
Rincon's management expresses optimism about the project's potential, emphasizing the value of building on previous exploration efforts. With permitting advancing and contract support engaged, Rincon is poised to commence exploration programs that could unlock considerable value for shareholders. The company's broader portfolio, including the Laverton and Telfer South projects, complements this strategic growth trajectory.
Bottom Line?
Rincon’s Crackerbox option could be a catalyst for growth, but the path from promising drill results to a viable mine remains to be charted.
Questions in the middle?
- How will Rincon prioritise drill targets within the extensive Crackerbox tenure?
- What are the timelines and milestones for completing due diligence and commencing exploration?
- Could toll processing arrangements with nearby operations accelerate project development?
