Fosterville South Acquires Three Additional GOLD Projects IN Victoria, Australia
FOSTERVILLE SOUTH ACQUIRES THREE ADDITIONAL GOLD PROJECTS IN VICTORIA, AUSTRALIA
April 20, 2020. Fosterville South Exploration Ltd. (“Fosterville South” or the “Company”, FSX:TSX
Venture) is pleased to announce it has entered into a purchase agreement with Mercator Gold
Australia Pty Limited (“Mercator”), a subsidiary of AIM listed ECR Minerals plc (“ECR”), whereby it will
acquire a 100% interest in three high-grade gold projects called the Timor Project, the Avoca Project
and the Moormbool Project (the “Gold Projects”).
Highlights of Transaction
• Significant historical mining of 1,390,000 ounces of gold from both the Avoca and Timor
projects, which includes 208,000 ounces of hard-rock mining at 13 g/t, at the Timor Project.
• Three gold focused tenements that increases land package by 271 km2
• Potential Fosterville style gold mineralisation on two of the properties.
• Considerable exploration upside with numerous drill ready prospects based upon earlier work.
Gold Projects
Within Central Victoria, t he L achlan Fold Belt is subdivided into various zones, based on distinct
geological and metallurgical characteristics. From west to east they are the Stawell Zone, Bendigo
Zone and the Melbourne Zone.
Moormbool Project
The Moormbool project area occurs east of Fosterville within the Melbourne Zone and is underlain by
Siluro-Devonian rocks. It covers an area between the Redcastle and Graytown goldfields, within which
occurs a south east striking large regional fault. Due to pervasive shallow alluvial cover, the project
area is largely unexplored. In close proximity to this regional structure and included within the project
area is a magnetic anomaly interpreted to be a small intrusive plug or cupola.
Initial soil geochemistry exploration indicates that both the southeast striking fault zone and the
intrusive zone are arsenic mineralized, and th erefore potentially gold mineralized. The magnetic
anomaly could be an intrusive related gold system similar to Mt Piper, near Broadford. Further
northwest, along strike of the fault zone, within the Redcastle goldfield extensive alluvial and hard -
rock gold mineralization was mined historically.
This licence compliments the Moormbool East Exploration Licence application held by Fosterville
South’s subsidiary Currawong Resources P/L, which lies immediately east of here.
Avoca Project
The Avoca project is centred on mesothermal quartz vein hosted gold and related placer -style ‘deep
lead’ gold minerali zation. There is a considerable local history of mining both kinds of deposit. The
term ‘deep lead’ refers to buried auriferous river bed deposits. The Avoca gold field produced
approximately 750,000 ounces of gold largely from alluvial gold deposits.
The Avoca project is located approximately 183 km west northwest of the Victorian state capital
Melbourne, with good road access. The Avoca project occurs within the S tawell Zone, west of the
Bendigo and Melbourne Zones.
Having previously been mined with a significant amount of gold production from both alluvial and
hard rock high grade sources, Fosterville South considers the Avoca project is highly prospective for
hard rock structurally controlled gold deposits. A number of major fault zones have been recognised
that strike for several kilometres. Gold mineralisation within the Stawell zone is generally base metal
sulphide related, which Fosterville South Exploration sees as an opportunity for disseminated or fine-
grained gold mineralisation.
The significant hard rock historic mines within the Avoca licence include the high grade:
• Pyrenees Reefs - 16,199 tons mined for 16,602 ounces of gold to 130 meters at an average
recovered grade of 32 g/t gold, worked from 1860 to 1912.
• Excelsior Reef - 13,200 tons mined for 9 ,260 ounces of gold to 100 meters at an average
recovered grade of 22 g/t gold, worked from 1909 to 1915.
• Vale’s Reefs – 1,444 tons mined for 1,388 ounces of gold to 52 meters at an average recovered
grade of 29.4 g/t gold, worked from 1865 to 1883.
• Monte Christo Reefs – 2,795 tons mined for 937 ounces of gold to 30 meters at an average
recovered grade of 10.3 g/t gold, worked from 1872 to 1877.
The production noted above was obtained from State of Victoria Mining Surveyors and
Registrar’s quarterly reports from 1860 to 1891 and annual reports issued thereafter. All of the
production occurred within the Avoca license.
Defined mineralization shoots are present at both the Pyrenees Reef and Excelsior Reef, as shown
from the underground mine plans held for both deposits.
In terms of alluvial gold deposit potential, the Avoca Sub -Basin, located within the Avoca project, is
also projected to contain one of the largest unmined ‘deep lead’ alluvial gold deposits within Victoria.
Timor Project
The Timor project occurs immediately east of the Avoca project and occurs within the Bendigo Zone
of the Lachlan Fold Belt.
The Timor project area contains numerous hard rock and alluvial gold deposits evidenced by
significant historical workings. Historical alluvial production within the Timor project area is believed
to have been in the region of 640,000 ounces of gold.
Around 20 hard rock workings can be considered to have been significant producers. These include
the Leviathan group of mines, with recorded gold production of 56,474 oun ces of gold from 189,085
tonnes, equating to a recovered grade of approximately 9.14 g/t gold. The Leviathan structural
corridor hosts a number of parallel quartz veins with most of the production coming from one mine
active in the early 1900s. Significant potential occurs within the various other veins and faults within
the corridor to the north.
In addition, Shaw’s Reef produced 16,881 tons mined for 12,623 ounces of gold to 130 meters at an
average recovered grade of 22.9 g/t gold, worked from 1883 to 18 91. Along strike of this fault zone
arsenopyrite and stibnite mineralisation are recorded in association with the gold mineralisation
indicating possible epizonal Fosterville style gold mineralisation.
Both these former mines lie on separate large regional north-south structures known to occur for tens
of kilometres with a number of hard rock workings over their length. Neither of these two major
structures have had significant drilling within the tenement. One traverse of RC drilling was carried
out across the Leviathan structure and one diamond drill hole too. No drilling has occurred specifically
on the Shaw’s reef fault zone. These two mineralised structures are the primary focus for Fosterville
South Exploration within the project.
Terms of Transaction
Under the terms of the purchase agreement, Fosterville South has agreed to pay AUD $500,000 to
Mercator in consideration of a 100% interest in the Gold Projects.
As additional consideration, Fosterville South will pay Mercato r AUD $1 for every one (1) ounce of
gold or gold equivalent of measured resource, indicated resource or inferred resource (“Resource
Estimate”) within one or more of the tenements comprising the Gold Projects, which payment shall
not exceed a total of AUD $1,000,000. In the event Fosterville carries out commercial production on
the Gold Projects, Fosterville South will pay Mercator AUD $1 for every one (1) ounce of gold or gold
equivalent ounces produced from one or more of the tenements comprising the Gold Projects, which
payment shall not exceed a total of AUD $1,000,000.
“We added three robust gold projects without any underlying royalty payments to Mercator. The
deferred payments are minimal and are only payable as we increase the value of these projects,”
states Rex Motton, COO of Fosterville South.
FliteGold Pty Ltd., an entity controlled by Mr. Motton, holds a royalty over the Avoca project. Under
separate negotiations, Fosterville South has agreed to issue 225,000 shares to FliteGold and, in
consideration of which, FliteGold will terminate its royalty on the Avoca project. The termination of
the royalty remains subject to acceptance of the TSX Venture Exchange.
Qualified Person
The technical content of this news release has been reviewed, verified and approved by Rex Motton,
P. Geo., COO and Director of Fosterville South; a qualified person as defined by NI 43-101. Historical
records were verified by reviewing annual reports from previous owners of the licenses by the
Qualified Person.
On behalf of the Company
Bryan Slusarchuk
Chief Executive Officer and Director
Adam Ross, Investor Relations
Direct : (604) 229-9445
Toll Free: 1(833) 923-3334
Email: [email protected]
Forward-Looking Statements
Information set forth in this news release contains forward -looking statements that are based on assumptions
as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions
and expectations. They are not guarantees of future performance. Fosterville South cautions that all forward
looking statements are inherently uncertain and that actual perform ance may be affected by many material
factors, many of which are beyond their respective control. Such factors include, among other things: risks and
uncertainties relating to Fosterville South’s limited operating history, its proposed exploration and deve lopment
activities on is Lauriston and Golden Mountain Properties and the need to comply with environmental and
governmental regulations. Accordingly, actual and future events, conditions and results may differ materially
from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information.
Except as required under applicable securities legislation, Fosterville South does not undertake to publicly update
or revise forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the Exchange) accepts responsibility for the adequacy or accuracy of this release.