The partners hope a 35,000m program will shore up resources along the Klondyke-Roses Pride and White Hope-Golden Plateau-Golden Mile lines of lode.

The companies are also pressing to be in a position to start pre-feasibility work on the Royal Shoot orebody at which there is an inferred resource of 390,000oz. The partners believe they can grow the resource by finding further high-grade shoots at depth.

“Early drilling is expected to focus on encouraging indications around Klondyke North and at Roses Pride,” Sedimentary Holdings said. “The program will include both discovery and delineation drilling.”

“In addition to the pre-feasibility study, development work will include progressing applications for two mining leases over selected areas of the exploration tenements, and completion of a decline study.”

The Cracow district is one of the older mining centers in Australia and historically most of the production has come from the Golden Plateau mine, which produced 850,000oz.

According to JB Were analyst Mike Brook, the district was previously regarded as fairly mature with a number of unsuccessful programs targeting larger, low-grade mineralised systems.

“With granted mining leases and the old Golden Plateau plant available [300,000tpa], mining could commence relatively quickly,” he said.

Sedimentary Holdings will fund its participation in the joint venture through an equity placement and a pro-rata, non-renounceable one-for-five issue at 11c, to raise $3.7 million.

The placement of 5.5 million shares at 11c is to be made equally to Lion Selection Group, a major shareholder in the company, and Macquarie Bank.