AUSTRALIA'S richest woman Gina Rinehart will fund almost $5 million for a gold exploration project near Bendigo.
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A subsidiary company of Ms Rinehart's Hancock Prospecting, Gold Exploration Victoria, reached an agreement on Thursday to fund $4.2 million towards the Four Eagles Gold Project, 70 kilometres north of Bendigo.
The project is a jointly-venture between Catalyst Metals and Providence Gold and Minerals, but the agreement will see GEV take over from Providence in a two-step process and after it invests two lots of $2.1 million.
Catalyst's technical director Bruce Kay said Catalyst would continue to manage and maintain its equity in the project, while Providence would get a 2.5 per cent royalty once the money was fully invested.
Mr Kay said the GEV investment would fund future exploration.
"Catalyst will be managing the program, Providence will still be very much involved and we will still continue to develop good relationships with local landowners and grain farmers,'' he said.
"We’re very cognizant of the need to work closely with landowners."
Mr Kay said Ms Rinehart's Hancock Prospecting had a strong history of mining and exploration in Australia and gold exploration was an extension of that.
He said the investment showed recognition that the northern and western parts of Victoria were "probably where the big (gold) discoveries are to be made in Victoria".
"I think they hopefully see the big potential of the area. Bendigo was historically the second richest gold field in Australia, chances are that you’re going to find gold there," he said.
He said while Victoria was "well endowed with gold" and had a long history of gold discovery, it was still relatively new to the type of exploration proposed.
"Victoria was originally one of the great gold states of Australia, but not many new gold discoveries are in Victoria compared to Western Australia," he said.
"It is almost a Western Australia exploration approach."
He said in the past Catalyst had spent about $2.5 million and Providence about $1.5 million on the Four Eagles Gold Project, which until now had been about establishing a "gold footprint" in an area about 6km by 2km.
"The problem is we'll drill one hole in one place, and one in another, but we don't know if they join up," he said.
"So we're tying to drill enough holes to see if we can find a continuous source of gold."
Mr Kay said part of the GEV funding would enable them to find out if there was continuous gold mineralisation in the footprint area.
"At the moment, we just have a lot of widely spaced holes that have gold values in them, but we don't have an idea of how much," he said.
"Everything up there is covered by sand, we have to drill through that and collect samples."
He said it was likely large gold deposits were sitting under about 20 to 30 metres of Murray Basin sediment, far deeper than where "old timers" would have looked for gold.
"It’s a bit like taking Bendigo and covering it with 20m of beach sand, we’re trying to find the gold under that sand," he said.
"We have to drill holes through the Murray Basin sediments and take a sample of what it's like underneath. It takes time."
He said siesmic geophysics and drilling would begin in April.
He said as well as the joint Catalyst and GEV venture, Catalyst will also undertake a range of other gold programs along the Whitelaw Gold Belt to Bendigo's north.
