Emmerson Resources Limited (ASX:ERM) has taken another step towards restructuring its Tennant Creek Mineral Field farm-in joint venture with Evolution Mining Ltd (ASX:EVN).
A deed of variation has been executed, reaffirming Emmerson’s retention of 100% ownership of the majority of the Tennant Creek tenements.
Evolution will take ownership of those tenements associated with the Gecko-Goanna-Orlando copper-gold prospects pending shareholder approval.
Approval would appear to be a formality given both companies are in agreement regarding the benefits that stem from the new restructuring agreement.
The right direction for both companies
As a much larger company, Evolution will be in a position to fund what is likely to be a fairly capital-intensive exploration program at the early stage Gecko-Goanna-Orlando prospects.
In contrast, the more advanced cash generating smaller scale operations such as the Edna Beryl Gold Project will progress under the full ownership of Emmerson.
From an exploration perspective, Emmerson is poised to begin drilling various gold, copper and cobalt targets in April.
READ: Emmerson Resources maps out drill plans for Tennant Creek
This development is in keeping with the company’s strategy as it looks to maximise value from its Northern Territory assets while generating cash flow to explore opportunities in New South Wales.
WATCH: Restructure of joint-venture deal the logical next step for Emmerson Resources
First production from a portion of the Edna Beryl Mine (Tribute Area) was outlined in December 2017.
Since then, plans have progressed for the commercial production from the Tribute Area which includes full-scale mining and processing.
This provides Emmerson with a risk-free income stream via a royalty agreement with the specialist small-scale miner, the Edna Beryl Mining Company.
This restructure will see Emmerson retain full control of the small mines and receive 100% of the revenue stream from the royalty proportional to the amount of gold produced.