Evergreen’s Gold Pivot: Leonora Acquisition Brings Production Ambitions and Execution Risks

Strategic Acquisition in a Premier Gold District

Evergreen Lithium Limited (ASX: EG1) has taken a decisive step to transform its business by acquiring the Leonora Goldfields Project (LGP) in Western Australia’s prolific central gold district. This acquisition signals a clear pivot from its lithium roots towards becoming an emerging gold producer, leveraging a JORC 2012-compliant inferred resource of 63,000 ounces of gold and an exploration target that could expand the resource by nearly tenfold.

The LGP comprises a substantial tenement package of 15 tenements, including 13 mining leases and prospecting licences, strategically located near world-class gold deposits such as Red 5’s King of the Hills (+4Moz) and Northern Star’s Sons of Gwalia (+6Moz). The project benefits from excellent access to mining infrastructure, including four processing plants within an 80-kilometre haulage radius, sealed roads, grid power, and a skilled regional workforce.

Resource and Exploration Potential

The current inferred resource of 63,000 ounces is based on 37 reverse circulation drill holes totaling 3,851 metres, covering three priority prospects: Craig’s Rest, Victor Bore, and Great Northern. These prospects exhibit near-surface mineralisation with grades suitable for open-pit mining, and importantly, a potential free-dig component due to weathering.

Beyond the defined resource, Evergreen highlights an exploration target of up to 592,000 ounces at an average grade of 3.6 g/t Au. This target is conceptual but supported by historical data, recent drilling, and extensive geological mapping. The company plans to expedite exploration activities to convert this potential into a JORC-compliant resource, aiming to fast-track development towards production.

Key Prospects and Historical Drilling Insights

Craig’s Rest stands out with significant historical intercepts, including high-grade hits such as 5 metres at 57.9 g/t Au from 16 metres depth. Victor Bore, located near the sealed Goldfields Highway, has returned encouraging results from recent drilling campaigns, including intercepts of 8 metres at 3.46 g/t Au, with some assays peaking above 20 g/t. Great Northern also shows promise with multiple intercepts exceeding 2 g/t Au, suggesting mineralisation continues at depth.

These prospects are complemented by other targets like Barlow’s Gully, which lies along a major regional fault zone and has shown gold assays up to 15.5 g/t Au in rock chip samples. The geological setting within greenstone belts and granite intrusives is highly favourable for orogenic gold deposits, underpinning the project’s exploration upside.

Acquisition Terms and Future Outlook

The acquisition was structured through the purchase of 100% of U Resource Pty Ltd, which holds the LGP assets via an option agreement with Infinity Mining Limited. Consideration includes an upfront payment of $100,000 for due diligence, 25 million fully paid Evergreen shares valued at $1.25 million, and deferred share issuances contingent on shareholder approval and milestone achievements, including a JORC-compliant resource upgrade to 100,000 ounces within three years.

Settlement is subject to customary conditions precedent, including due diligence satisfaction, regulatory and third-party approvals, and Native Title considerations. The upfront and deferred shares will be escrowed for 12 months, aligning vendor interests with Evergreen’s development progress.

Implications for Evergreen and the Market

Evergreen’s acquisition represents a strategic diversification into gold mining, a sector with strong investor interest amid ongoing global economic uncertainties. The Leonora Goldfields Project offers a compelling platform with near-term production potential and significant exploration upside. The company’s plan to accelerate drilling and development could unlock value for shareholders and reposition Evergreen as a multi-commodity miner.

However, the exploration targets remain conceptual, and the path to production will require successful resource upgrades, metallurgical testing, and environmental assessments. Market participants will watch closely how Evergreen navigates these technical and regulatory hurdles while managing capital allocation between lithium and gold assets.