Tectonic Resources (ASX: TTR) has acquired from Pioneer Resources (ASX: PIO), subject to certain conditions being satisfied, a strategic package of 172 sq.km of tenements highly prospective for gold and copper adjacent to its existing portfolio of ground in the Ravensthorpe region of Western Australia.
As consideration, Tectonic will issue to Pioneer 500,000 two year options in Tectonic at a 10% premium to the 30 day VWAP and grant a 1.5% NSR royalty for all commodities other than iron ore and manganese.
On completion Tectonic will have significantly increased its position as the major tenement holder of highly prospective gold copper endowed ground in Ravensthorpe.
Pioneer retains its rights to iron ore and manganese which is subject to a separate agreement with Mineral Resources Ltd. In the event Mineral Resources Ltd elect to withdraw these rights will revert to Tectonic in return for a NSR royalty of 3.5% on iron ore or manganese, payable to Pioneer on any production from these commodities.
The Newly acquired tenement holding features an immediate opportunity to convert remaining Copper Gold at the historic Mt Desmond mine to a JORC compliant resource.
It has several advanced Copper & Gold prospects that are drill ready and there are numerous underexplored grass roots prospects.
The majority of the tenement have been subjected to little modern systematic exploration and a significant geological, geophysical and geochemical data base has been inherited. The company's tenement holding has increased to 578km², up from 406km².
Steve Norregaard, managing director, said “this deal provides further confidence to the company that its Phillips River Project, as initially contemplated, is only just the beginning."
"Tectonic are the first modern exploration company to consolidate the majority of the historic Ravensthorpe to Kundip mining district” he said.
With both companies realizing the strategic importance of a consolidated tenement package, Tectonic for the first time, has gained access to most of the extensive number of gold and copper occurrences in the district, with some already drilled to the extent resources can be established.
“This is seen by both companies as a means to expedite Tectonics’ return to being a miner and a long term major player in the revival of mining in the Ravensthorpe region, with Pioneer participating through its retained royalties,” said Norregaard.
The newly acquired tenements represent the northern continuation of the highly prospective Achaean greenstone belt, locally known as the Annabelle Volcanics along strike from Tectonic’s Kundip mineral resource (738,000 oz gold and 24,400 copper tonnes).
The company now controls the majority of the 560 historical mining operations within the Ravensthorpe district.
On July 6 the company reported the overall Phillips River Gold resource base had increased another 21,000 ounces to 901,000 gold ounces as a result of the re-estimation of the Flag Resource at Kundip, which has seen a 15% increase to 165,000 ounces, up from 144,000oz (January 2009).
Tectonic has 362 million issued shares, a market capitalisation of A$24.0 million and cash and investments A$3.0 million.