Falcon Metals (ASX: FAL) has moved quickly to expand its landholding in the mineral-rich Yilgarn Craton in Western Australia with the signing of a joint venture earn-in and mineral rights agreement, as well as a new exploration licence application.

The company has agreed to invest up to $2 million in two stages under an agreement with Errawarra Resources (ASX: ERW) to earn up to a 70% interest in exploration licence E09/2457, covering all minerals except graphite.

Falcon has also added to its landholding in the project area with a permit application covering an 102 square kilometres in a new project to be known as the Errabiddy gold project.

Errabiddy potential

Falcon is targeting craton margins known to be prospective for the formation of large gold deposits such as the Tropicana deposit discovered on the eastern margin of the Yilgarn Craton in 2005.

The prospectivity of this play type was further confirmed at the recently discovered 2.6-million-ounce Karlawinda gold project, located in a similar setting on the southern margin of the Pilbara Craton.

Elsewhere, the Big Sky prospect was discovered by Lodestar Minerals (ASX: LSR) in 2015, less than 3km from the eastern boundary of the new application.

Olsen Well focus

Falcon has identified the Olsen Well prospect as an early exploration target.

Errawarra initially identified Olsen Well from a review of public domain stream sediment data that highlighted the area from sampling conducted by a previous explorer in 1994.

Regional geochemical sampling by the Geological Survey of WA detected a 6 parts per billion (ppb) gold anomaly near Olsen Well, while an ultrafine soil sampling program in 2023 defined a 3km by 1km 10ppb gold anomaly with coincident arsenic and bismuth and a peak gold value of 234ppb.

The indications are that this anomaly remains open along strike, with areas in similar structural and geological positions yet to be soil sampled.

An initial phase of confirmatory soil sampling is now planned for Olsen Well in the first half of 2025, with drilling to follow.

Earn-in terms

Under the agreement with Errawarra, Falcon has the right to earn up to a 70% interest in the licence via staged expenditure.

Falcon will initially incur $750,000 in expenditure within 24 months to earn a 51% interest, with a further 19% able to be earned through $1.25m in expenditure within 36 months.

Once the second earn-in has been achieved, Errawarra has the option to elect to convert its percentage interest to a 2% net smelter revenue (NSR) royalty, while Falcon can purchase 50% of the NSR royalty for $2m.

Falcon has also agreed to a minimum expenditure commitment of $200,000 prior to withdrawal, which includes $80,000 in cash reimbursement to Errawarra for expenditure incurred to date.