Mount Gibson Iron moves into gold
Mount Gibson Iron (ASX: MGX) has entered a binding agreement to acquire Northern Star Resources’ (ASX: NST) 50% interest in the Central Tanami gold project in the Northern Territory.
The Central Tanami project is an equal joint venture with Tanami Gold (TAM) established in 2015, for a cash consideration of $50m.
Mount Gibson chief executive Peter Kerr says the acquisition represents a compelling opportunity to enter the gold sector at an attractive price.
“Involvement in the Central Tanami gold project provides Mount Gibson with an opportunity to leverage the success of its Koolan Island iron ore operation to establish the foundations of a gold production business,” he said.
“Given the substantial work that has been undertaken on the project by the [joint venture] to date, we intend to work with Tanami Gold to fast track technical studies to position the project for a development decision within the next 12-18 months.”
The project comprises more than 2,100m2 of mining and exploration tenements, hosting a current mineral resource estimate (MRE) of 13.8mt at 3.6g/t of gold for 1.6moz of contained gold. There is strong potential to increase the resource base through further resource definition and exploration drilling.
Existing infrastructure presents refurbishment opportunities for future project development, including, an on-site 1.2mpta carbon-in-leach processing plant, haul roads, an accommodation camp, bore field and gravel airstrip.
Key conditions to completion, comprise foreign investment review board approval, further extension of existing infrastructure arrangements on one tenement by the Central Land Council, non-exercise by Tanami Gold of its right of first refusal and various other pre-completion standard items.