Emmerson Resources Ltd (ASX:ERM) has poured first gold from the Edna Beryl Gold Mine in the Northern Territory.
Three gold bars have been poured from the first 1200 tonnes of development ore which came from the 90 metre level development drive.
This ore averages more than 35 g/t gold and assay results from underground sampling for the drive correlate well with these grades.
Edna Beryl will be high grade mine
Providing the grades are representative of the overall head grade, Edna Beryl will become one of the highest grade gold mines in Australia.
Full-scale mining is expected to start early in 2018.
Edna Beryl is the first in Emmerson’s small mine portfolio in the Tennant Creek Mineral Field to be developed under an agreement with the Edna Beryl Mining Company (EBMC).
EBMC is a specialist operator in small mines and has already developed much of the Tribute Area covered by the agreement.
Providing a revenue stream
Rob Bills, managing director, said: “The commencement of production at Edna Beryl is a pivotal step since Emmerson began exploration in the Tennant Creek Mineral Field in 2008.
“It not only provides a revenue stream but establishes a template for unlocking value in many of our other projects contained within our extensive, 2,800 square kilometre tenement package.
“We believe this tribute style of agreement maximises value and mitigates risk whilst providing great insights for our near mine and regional exploration programs.
“As we know, small mines can often grow into big mines.”
Tribute agreement advantages
The Tribute agreement provides Emmerson with a number of advantages including a risk-free income stream from non-core assets via a royalty arrangement.
This is proportional to the final amount of extracted gold and Emmerson’s equity in the Tennant Creek Mineral Field Joint Venture, which is currently 100%.
It provides future access to underground workings enabling near mine exploration.
The agreement also provides the opportunity to monetise other non-core assets within the extensive tenement holdings.
Interim processing of ore is being carried out by EBMC at the Tennant Creek Battery.
Once full-scale mining within the area begins ore will be processed through a portable mill.
Recent drilling outside of the Tribute area suggests significant extensions to the high-grade gold that will be further investigated by underground drilling in 2018.
Warrego Mill commissioned
In addition, Emmerson has commissioned the recovery of residual gold from its 100%-owned Warrego Mill, 35 kilometres from Tennant Creek.
To date this has yielded 230 ounces of gold with a further circa 11 kilograms of gold dore yet to be delivered to the Perth Mint.
Emmerson is entitled to 25% of all the gold from this process.
READ: Emmerson Resources set to increase exploration news flow from Kadungle and Tennant Creek
Tennant Creek Mineral Field is one of Australia’s highest grade gold and copper fields producing more than 5.5 million ounces of gold and in excess of 470,000 tonnes of copper from a variety of deposits.
These deposits, including Gecko, Orlando, Warrego, White Devil, Chariot and Golden Forty, are all within Emmerson’s exploration and joint venture portfolio.
Exploration is funded via a farm-in agreement with Evolution Mining Ltd (ASX:EVN).
Evolution is sole funding exploration expenditure of $15 million by 31 December 2017 to earn a 65% interest.
It can then sole fund a further $10 million over two years to earn an additional 10%. Emmerson is the operator and manager during the first stage of the farm-in.
WATCH: Emmerson Resources very encouraged by early drilling at Kadungle
The company has also recently started exploring gold-copper projects in New South Wales, including the Kadungle project.
Visible copper sulphides have been identified during a diamond drilling program, which is expected to be completed this week.
Kadungle is to the east of the company’s large Fifield exploration lease and to the west of Rimfire Pacific Mining NL’s (ASX:RIM) Sopresa discovery.