Emmerson Resources (ASX:ERM) has intersected visible, high-grade gold on two levels during development work at the Edna Beryl Mine located in the Northern Territory.
The mine is within the Tennant Creek Mineral Field (TCMF) joint venture and will be the first producing asset in a strategy which aims to monetise a pipeline of small high-grade gold projects.
The development and production of the Edna Beryl small mine is via a tribute agreement with the specialist small miner, the Edna Berryl Mining Company.
Significantly, recently the Northern Territory government outlined initiatives to revitalise Tennant Creek and make it the ‘Mining and Services Centre’ of the Northern Territory.
Rob Bills, managing director, commented: “This tribute agreement and progress on the development at Edna Beryl is a terrific template for our other small mines.
“It is a major step toward the resumption of mining activities within the Tennant Creek Mineral Field and will benefit all stakeholders.”
Drill results
Emmerson’s first small mine at the TCMF has intersected visible, high-grade gold on two levels in the development drives.
Pre-development drilling at Black Snake, Emmerson’s next planned small mine intersected:
- 7 metres at 4.79 g/t gold from 18 metres including 3 metres at 9.51 g/t gold; and
- 7 metres at 2.85 g/t gold from 19 metres including 2 metres at 7.48 g/t gold.
Black Snake is considered an advanced exploration target, which based on available data is considered to host around 7,000 to 10,000 ounces of gold.
This small program of pre-development reverse circulation drilling has confirmed the shallow, high-grade nature of the gold mineralisation.
Permitting of the Black Snake Mine ahead of development is well advanced.
Northern Territory government support
The government’s feasibility study into a central mining centre at Tennant Creek recognises the long-term benefits of encouraging mining companies to get on the ground and start mining.
The feasibility study will look into how to get a common user mineral processing facility underway.
The government initiative will greatly assist Emmerson’s small mine strategy in providing a clear pathway to production via treatment at the proposed central mill.
It will have the net benefit of lowering the cost of production and stimulating further exploration, not to mention very positive benefits for the local communities.
Background
Emmerson’s flagship project is its TCMF joint venture where all exploration is fully funded by the farm-in and joint venture with Evolution Mining (ASX:EVN).
Through expenditure of $15 million over three years, Evolution will earn a 65% interest (Stage 1 Farm-in) in Emmerson’s tenement holdings in the TCMF.
The TCMF is one of Australia’s highest grade gold and copper fields producing over 5.5 million gold ounces and 470,000 tonnes of copper from a variety of deposits including Gecko, Orlando, Warrego, White Devil, Chariot and Golden Forty.
All of these deposits are within Emmerson's exploration and joint venture portfolio.
The mine management plan for the first small mine is awaiting approval from the Northern Territory department of mines before production can commence.
Analysis
Both the drilling results and government initiatives are welcome tail winds for Emmerson as it gets closer to maiden production from the first mine in its small mines strategy.
Furthermore, the tribute agreement is structured so that the Edna Beryl Mining Company is self-sufficient and does not distract from the key task of discovering a new generation of gold-copper deposits in the TCMF.
If successful the tribute mining will supplement Emmerson’s already healthy cash reserves and provide further opportunities to grow these small mines into large mines via underground exploration.
Shares in Emmerson are trading up 110% over the past 12 months, currently priced at $0.091.