Joint Venture
MCO believes there are also substantially under-explored areas on its current tenements including high-production old mines and dykes, many of which produced high grade gold only above the water table as historically, sub-water table level mining was hampered by lack of power to run pumps and harder host rocks below the 'weathered zone' near surface. Consequently there were hundreds of small workings which were at or near surface and not many went deeper than ~50 metres depth.
Running concurrently with the production commencement and underground drilling at the Morning Star Goldmine is MCO's Regional Exploration Program (REP). The REP gained a significant boost in 2010 with the $4.5M JV announced with Ample Rise of Hong Kong, which has since been assigned to the parent Shandong Tianye Group of Jinan, Shandong, China. Shandong is listed on the Shanghai Stock Exchange. The REP will endeavour to establish an exploration resource target in the surrounding old mines and under-explored dykes contained within existing Morning Star's 5 granted Mining and Exploration Licences, 3 of which are held 100% by Morning Star Gold (those being MIN 5009, ELs 5079 & 4320) and 2 of which (MINs 5241 & 5299) are being farmed into by Shandong Tianye. MCO's new mining partners are an investment group from mainland China with large gold aspirations. They have agreed to spend $4.5M over 2-3 years and at the end will have aquired 51% of the two current MINs(5241 Matlock & 5299 Gaffneys Creek) with Morning Star operating and managing the JV for a 15% fee. The primary targets for the JV are the All Nations & Loch Fyne near Matlock, 7kms southeast of Woods Point and the Rose of Denmark & Hunts prospects near Gaffneys Creek (~15kms northwest of Woods Point) but other targets will emerge as the program picks up pace over 2011-12.
The JV was originally announced in the attached document:
MCO Announces Joint Venture on Regional Targets
Other Aspects of Regional Exploration Program
MCO has systematically re-surveyed, mapped and relocated old workings and is currently sampling several proximal dykes to the Morning Star inside and outside the JV. These include several mines, which collectively produced over 400,000 ounces of gold at high grade, from shallow workings (~50-100 metres deep) mainly above the water table, such as 'The Comet', 'Little Comet', 'All Nations', 'Waverly', 'Tingha' and 'Loch Fyne' dyke systems. The Morning Star dyke by comparison was mined successfully at depths of over 700 metres below the water table and was open at depth with visible gold noted by WMC in drill core beneath the limit of its lowest workings at the time of its closure in 1963.
MCO's key regional targets include good sized historical producers such as the 'All Nations' (132,000 ounces production), the 'Comet' (64,000 ounces), the 'Waverly' (~50,000 ounces) and the 'Loch Fyne' (109,000 ounces of Gold but also rich in Platinoids). MCO plans to test the depth of these dykes and the presence of deeper quartz reefs through deep diamond drilling over 2010-13. All targets within the REP are being added to the Company's 3D modelling as they are surveyed, sampled and ultimately drilled.
The Regional Exploration Program was conceived in 2008 and is aimed at establishing a greater overall gold endowment from these surrounding unexplored dykes, which are all contained within the Company's existing Mining and Exploration Licences that adjoin the Morning Star Mining Licence (MIN 5009). It was at this time MCO decided to expand tenements tenfold to ~200km2 after having originally only held the Morning Star Goldmine.
Additionally Morning Star has a northern Mining Licence at Gaffney's Creek (MIN 5299) known as the 'Dempsey Licence'. This Mining Licence contains the historically rich Dempsey, Hunts and Rose of Denmark Mines which have produced ~87,000ozs Au.
MCO Mining Titles and overall east Victorian tenements can be found in this PDF:
