AuKing Mining Ltd has secured the right to earn up to a 50% shareholding interest in Orion Resources Pty Ltd, the proposed owner of the Cloncurry Gold Project in northwest Queensland.
AKN previously entered into an agreement with Orion to earn up to 15% in return for $1.5 million in project-related expenditure, with the new agreement incurring a total of $5 million in project funding before June 30, 2027.
Orion is finalising its acquisition of Cloncurry as well as the Lorena processing plant and the Mt Freda/Golden Mile deposits nearby – the company is also considering processing material from the Tick Hill mine and tailings.
“Excellent” opportunity in gold sector
“Having already secured the right to acquire a 15% interest, AuKing now has the ability to acquire a more substantial 50% total interest in the Cloncurry Gold Project assets that are being acquired for development by Orion,” AuKing Mining managing director Paul Williams said.
“When you consider that those assets comprise a central processing plant (Lorena), mining and exploration licences and (as recently announced) access to materials from other mining projects in the region such as Tick Hill, AuKing is well-positioned to play a key role in overseeing the re-establishment of mining and processing operations around Cloncurry in north Queensland.”
Orion’s Cloncurry Gold Project interests, including the Mt Freda/Golden Mill mining leases.
The earn-in agreement terms are as follows:
- The focus of activities by AuKing will include exploration, drilling and resource estimation work associated specifically with the Mt Freda/Golden Mile Project areas but also now addresses other aspects of Orion’s development program including Tick Hill tailings re-processing and Lorena plant refurbishment.
- AuKing will have the right to earn a 50% interest in the total package of assets (comprising the Cloncurry Gold Project) that are being acquired by Orion by spending $5 million on Cloncurry Project development activities, including proposed exploration, drilling and resource estimation work at Mt Freda/Golden Mile on or before June 30, 2027.
- AuKing will be involved in the various aspects of project development based around the Lorena plant as well as the resource development funding for the proposed Mt Freda/Golden Mile mining operation.
- On completion of the AuKing earn-in, an incorporated joint venture will be established with AuKing holding a 50% shareholding interest in Orion.
- In the event of AuKing failing to meet the $5 million expenditure amount, its interests in the Cloncurry Project will lapse.
Some other features of the agreement between AuKing and Orion include:
- Orion will meet the purchase price obligations for the purchase of the Cloncurry Gold Project from its own sources and no funds are payable by AuKing; and
- There are no additional rights for AuKing to acquire further interests in the Cloncurry Gold Project after it acquires the 50% holding. To the extent any further rights are created, that will be a matter for future negotiation.