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Enterprise Metals eyeing partner for Murchison as it grows exploration ground

Enterprise Metals Ltd. is content to be without a managing director for now, after having acquired more ground at its Murchison gold project in Western Australia, for which it is looking for an operating partner, in an environment where midtiers have an appetite for growth and sentiment around gold is rising.

The junior announced Dec. 27 that it was acquiring the rights to an 80-square-kilometer exploration license covering northern extensions of structures hosting the Cuddingwarra gold deposit and Emily Well copper-zinc deposit on Westgold Resources Ltd.'s Central Murchison property.

Enterprise believes that the tenements can be quickly and effectively tested using airborne geophysics combined with geochemical work using historical gold exploration programs, which will be followed by aircore drilling.

The company announced Dec. 3 that it received airborne survey data on the southwestern part of the Murchison project covering the northern extensions and the junction of the mafic units, hosting Westgold's Big Bell and Cuddingwarra gold deposits, which Enterprise sees as a prime exploration target entirely covered by alluvium and underexplored.

Enterprise is seeking an operating partner for Murchison where it is free carried similar to partnerships with Sandfire Resources NL for the Doolgunna project and Constellation Resources Ltd. for the Orpheus project.

Enterprise nonexecutive Chairperson Allan Trench said it would be better for an operating partner to be found for Murchison given Dermot Ryan resigned as Enterprise's managing director earlier in December, a move Trench said was partly to reassure the market there would be no dilution to his role as managing director of Enterprise shareholder Alto Metals Ltd.

While Ryan's roles across both companies do not necessarily mean Alto would be trying to do a deal with Enterprise on Murchison, Trench said the project could be well-suited to bigger players that have shown an appetite for inorganic growth via acquisitions, particularly given Enterprise is not looking for a managing director replacement.

"To explore it properly, we'd need a significant amount of funds or a third party. We'd be more than happy with a free-carried position with a quality partner," Trench said.

Trench said the project "would be the largest tract of greenstone in the Murchison area that's unencumbered and not held by a party that's exploring to fill a gold mill at the moment," and it was a "big enough project to interest a large party."

While some say the Murchison area is well explored, Trench said, "You could almost count on two hands how many holes that have gone more than 100 meters deep" in the Sandstone greenstone belt, which covers roughly 1,000 square kilometers.

"In mining throughout the Yilgarn, there has been no testing at all at depth in the Sandstone greenstone belt, which has about 10 or 15 deposits which have got 30,000 ounces or more in them," Trench said. The likes of Westgold, Ramelius Resources Ltd. and Musgrave Minerals Ltd. all doing exploration deals recently in the state speaks to a positive gold sentiment.

Broader view

Financial services firm Hartleys' resources analyst Paul Howard agreed that gold was certainly popular at the moment given the robust Australian dollar gold price and told S&P Global Market Intelligence that "everyone's looking for a good news story coming into the new year," and "everyone wants to own gold at Christmas."

He said that while Ramelius is busy with its takeover of Explaurum Ltd., other midtier gold companies have shown an appetite for growth via M&A, particularly Northern Star Resources Ltd.

Westgold Managing Director Peter Cook, whose company just bought Doray Minerals Ltd.'s Andy Well and Gnaweeda gold projects as part of its massive central Murchison aggregation strategy, told S&P Global Market Intelligence that his company prefers to own assets outright as partnerships are "problematic."