Following the board-level formal authorisation of an independent mineral resource estimate (MRE) for the Jelani Resources project area, in South Africa’s Free State province, Aim-listed Lexington Gold now has a net attributable total resource of 2.7-million tonnes for 500 000 oz of gold in the project.

The net attributable resource has the potential to increase to ten-million tonnes, for 2.24-million ounces of gold, should Lexington and its joint venture (JV) partners proceed to future production on a revised ownership interest and including the buffer zone that is currently held by JSE-listed Harmony Gold.

The Jelani project is held by an incorporated JV between White Rivers Exploration (WRE) with a 65% stake, and two subsidiaries of Harmony Gold – Lorraine Gold Mines and Avgold – which together hold 35%. In turn, WRE is owned 76% by Lexington and 24% by a broad-based black economic empowerment partner. 

“The total combined inferred, indicated and measured Joint Ore Reserves Committee MRE of 6.02-million ounces, at a grade of 6.47 g/t gold in which we have an interest, is a very significant resource and showcases the huge potential of the asset,” says Lexington nonexecutive chairperson Ed Nealon.

BACKGROUND

The MRE comprises 6.02-million ounces of gold, of which about 2.95-million ounces could potentially be attributable to WRE in the event that all of the Jelani Resources project start milestones are ultimately achieved.

These milestones include completion of a prefeasibility study, successful completion of a bankable feasibility study (BFS), a decision to mine being approved by Jelani Resources' shareholders and WRE electing to participate in the funding of future development costs in order to retain a 49% share in Jelani Resources. 

The estimated mineral resource within the buffer zone is currently attributable solely to Harmony. 

Harmony has previously indicated that Jelani Resources will, subject to the successful completion of a BFS, be afforded the opportunity to mine the resource in the buffer zone provided that a decision to mine has been approved by Jelani Resources' shareholders; commercial terms have been agreed between the parties in respect of the buffer zone; and approval from the board of directors of Harmony has been obtained.