PERTH (miningweekly.com) – ASX-listed Prodigy Gold has signed an operator agreement over its Old Pirate gold project, in the Northern Territory, and an option agreement over the Buccaneer project, in the same region.
Under a ten-year operator agreement, unlisted TRL Tanami will pay Prodigy an initial $200 000 plus a pro-rata tenement cost within 14 days of the agreement, and an additional A$301 412 within its appointment as operator.
The payment includes reimbursement of all holding and rehabilitation costs of the Old Pirate project, while the replacement of security bonds of more than A$1.7-million will also need to be replaced before the end of January 2020, or TRL Tanami received approval to start mining.
Prodigy will also retain a 2.5% net smelter royalty of any future production from the Old Pirate project during the ten-year term of the operator agreement.
Meanwhile, the operator agreement also enables TRL Tanami to enter into an exclusive three-month option period over the Buccaneer gold project, for an option fee of A$2-million, to negotiate a staged earn-in of up to 100% into the project for an additional A$15-million.
Prodigy MD Matt Briggs on Thursday said that the operator agreement was a high value accretive transaction for Prodigy, and consistent with the company’s strategy of unlocking value from its projects.
“The potential redevelopment of the Old Pirate and Buccaneer projects is an exciting step forward for the Tanami district and once operational, will also provide potential scope for Prodigy to tribute or toll treat its nearby projects.
“This agreement also significantly reduces Prodigy’s holding costs and solidifies our cash reserves, ensuring we have the necessary funding flexibility to continue our aggressive exploration programmes and meet our expenditure commitments at programmes currently being undertaken across our portfolio and with a number of our major joint venture partners.”