Emmerson Resources Limited (ASX:ERM) has entered into a binding agreement to sell its mothballed Warrego Mill Lease in Australia's Northern Territory to Territory Resources Ltd.
In exchange, Territory will build a modern processing facility on the site and prioritise the processing of ore from Emmerson’s assets over other third-party ore.
Emmerson managing director Rob Bills said: “The development of a modern centralised processing facility at Warrego is a major step forward to establishing an integrated exploration, mining and processing hub in the Tennant Creek Mineral Field.
READ: Emmerson Resources gets overwhelming shareholder support for Tennant Creek strategy
Bills added “This is something Emmerson has been championing for some time as it has the potential to unlock stranded gold assets in the region and is consistent with our strategy of monetising our smaller, high-grade resources.
“This will generate additional funding for one of the most exciting exploration programs in the history of Emmerson – aimed at discovery of high-grade gold, copper and cobalt, similar to our recent discoveries at Edna Beryl and Jasper Hills.”
First gold production expected to occur in late 2018
Territory is an experienced mining and processing operator with a successful track record at other sites around Australia.
Emmerson and Territory will work collaboratively to establish profit share or royalty agreements pertaining to the mining and processing of Emmerson’s portfolio of mines and tailings at Warrego.
Territory’s intention is to construct a modern, 300,000 tonnes per annum processing facility on the Warrego Mill lease.
First gold production is projected to occur in late 2018 – contingent on receiving the necessary regulatory approvals.
Joint venture over Tennant Creek tenements
As part of the strategic alliance, Territory will enter into an earn-in and potential joint venture over Emmerson’s southern tenements, subject to reaching agreement on the commercial terms.
This area is the most gold endowed portion of the Tennant Creek Mineral Field.
Black Snake Mine
Emmerson’s Black Snake gold project is located in the southern tenements, about 70 kilometres southeast from the proposed Central Processing Facility.
The recent approval by the Northern Territory Government for a mining operation at Black Snake gives Emmerson an opportunity to fast-track development of a second small mining project after Edna Beryl.