PERTH (miningweekly.com) – The share price of Emmerson Resources rose by 6% on Thursday as the company revealed a strategic alliance with Territory Resources, that could fast-track gold production at the Tennant Creek operations.
Under the strategic alliance agreement, Territory Resources will subscribe for A$2-million new Emmerson shares, priced at 10.35c each, giving the company a 4.55% shareholding in Emmerson.
The two companies also entered into a binding agreement under which Emmerson would sell its mothballed Warrego mill and mining lease to Territory, in exchange for that company building a 300 000 t/y carbon-in-pulp processing facility at the Southern Project Area (SPA), at Tennant Creek.
The plant would likely be in operation by the end of 2018, or early 2019, subject to the receipt of regulatory approvals.
In addition, the two companies have also negotiated a profit share and gold royalty agreement for the development and mining of Emmerson’s portfolio of mining projects within the SPA, under a mining joint venture agreement.
Mining planning and scheduling by Territory is well under way, with a number of both opencut and underground projects planned concurrently.
“This strategic alliance is transformational for Emmerson and the wider Tennant Creek region,” said MD Rob Bills on Thursday.
“For Emmerson shareholders, it provides a low-risk pathway to commercial production from our smaller mines and importantly, will generate funding for ongoing exploration programmes in the Northern Territory and New South Wales.”
Bills said that the earn-in funding provided by Territory for the SPA will further build the pipeline of mining projects to feed the new milling facility under construction.
“This strategic alliance and milling facility will see the re-establishment of Tennant Creek as an integrated exploration, mining and processing hub, thus realising Emmerson’s long-held vision and that of the Northern Territory government.”
Emmerson shares were trading at a high of 7.7c a share on Thursday, up from a low of 7c a share.