Strata Minerals has closed its 100% acquisition of the Penny South Gold Project, significantly expanding its gold exploration efforts in Western Australia (WA).

The project, covering an area of 9.95km², is located just 550m south of the productive Penny gold mine.

For the acquisition, Strata paid Aurum Resources A$60,000 ($41,531) in cash and issued three million shares, priced at $0.02 each.

Additionally, a deferred cash payment of $500,000 is contingent upon Strata identifying a gold resource of at least 50,000oz with a minimum grade of one gram per tonne.

This agreement also includes a clause for an additional payment of $500,000 for each new discovery of a 50,000oz gold resource within the next five years, provided the finds meet the required grade.

The Penny South Gold Project consists of four blocks and has seen previous drilling efforts, which resulted in numerous anomalous gold intersections.

More than 1,000 drill-holes have been carried out within E57/1045, predominantly consisting of rotary air blast and air core holes, with reverse circulation holes making up only around 3% of the total.

With an average drilling depth of around 42m, Strata has noted that only 18 holes have reached depths exceeding 100m, and just seven have gone beyond 200m.

As of now, no diamond drilling has taken place at the site.

Strata managing director Peter Woods said: “We are extremely pleased to have completed this strategic acquisition of the highly prospective Penny South Gold Project following shareholder approval.

“Securing this asset, which is next door and along strike 550m south to one of the highest-grade producing gold mines in Western Australia, is very exciting. We are thankful for the support shown by shareholders to approve the acquisition as we continue to transform the company and now look forward to rapidly progressing the project.

“The company is of the view that the project has not yet been fully tested at depth and we are eager to unlock any potential value.”