The company plans to review all geological, geochemical and historic drill-hole data at the property. Credit: A_stockphoto/Shutterstock.

NickelX has signed a binding agreement to acquire 100% of the Penny South gold project in Western Australia from Aurum Resources.

The project is situated approximately 550m south of the Ramelius Resources-operated high-grade Penny West/North Gold Mine.

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Historical production and recent discoveries in the area indicate significant gold mineralisation potential, with the Penny South Gold Project encompassing approximately 2.5km of the prospective Penny West Shear.

Under the agreement, NickelX will pay A$60,000 ($40,588) in cash and issue three million shares to acquire 100% of the project, which covers 9.95km².

Additional deferred cash considerations of A$500,000 are structured around the confirmation of gold resources as per the JORC Code.

The completion of the acquisition is subject to shareholder and regulatory approvals.

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NickelX managing director Peter Woods said: “We are extremely pleased to have reached an agreement for the acquisition of the Penny South Project. The addition of this exciting gold exploration asset next door to one of the highest-grade gold mines in production in Western Australia, and in a district seeing current M&A [mergers and acquisitions] activity, greatly enhances our existing portfolio.

“Given the minimal deeper drilling and lack of diamond drilling, it is the company’s view there may be substantial value to be unlocked at depth and we are eager to execute a path forward to test the theory as the momentum for gold continues.”

Historic drilling has revealed numerous gold intersections, with more than 1,000 drill holes completed, predominantly at shallow rotary air blast and air core holes.

The company and its consultants also plan to compile and review all geological, geochemical and historic drill-hole data at the property with the aim to define high-priority drilling targets at depths greater than 80m below surface.