An intercept of 9m grading 110.5 grams per tonne gold from 42m was made down-dip of a result in December of 15m at 111gpt gold from 25m at the new Mosaic Lode discovery adjacent to the White Heat prospect (and upcoming resource).

Musgrave currently believes the lode has a strike of 40-60m.

Despite that, Musgrave believes Mosaic can still be a contributor to any future development of the project.

"Even modest tonnages at these sort of near-surface grades could have a positive impact on the future project economics," the company said.

Musgrave has three rigs in action on its 100% held ground, and another machine on tenure involved with its joint venture in the region with Evolution Mining.

The current resource estimate for Cue totals 6.4 million tonnes grading 3.2gpt gold for 659,000 ounces including the Break of Day deposit (797,000t at 10.2gpt for 262,000oz) and the Lena deposit (4.3Mt at 2.3gpt gold for 325,000oz).

A new resource is targeted for next quarter.

Musgrave started the March quarter with A$17.5 million cash.

Shares in Musgrave were up 14% to 32c in early trade, capitalising the company at $172 million.

The stock has a 52-week high/low of 46.5c/25c.