PNX Metals Ltd (ASX:PNX) has allowed the exclusivity period relating to a proposed joint venture for the funding of infrastructure and production sharing for its 100% owned Fountain Head Gold deposit to lapse.
The proposed joint venture was with Halifax Capital Pty Limited (HC) and its subsidiary Bridge Creek Mining Pty Limited (BCM).
As no agreement satisfactory to PNX has been reached, PNX has elected not to extend the negotiations (or negotiating period) and will retain 100% of the project on its own terms.
“Significant opportunities to grow the scale of the project”
PNX Managing Director James Fox said: “The Fountain Head Gold Project and high-grade zinc-gold-silver Hayes Creek Project continues to evolve and our discussions with potential earn-in partners has served to highlight the significant opportunities to grow the scale of the project both from within existing PNX tenements and from the numerous ‘stranded assets’ within the region.
“With the backing of major shareholders and support from NT Governments eager to see expanding business and employment opportunities, we expect to expedite the Feasibility Study with the aim of commencing development activities during 2021.”
Feasibility study to be fast-tracked
There has been a significant improvement in the Fountain Head and Hayes Creek Projects economics during the period of JV negotiations, particularly related to silver and zinc prices, with forecasts for metal prices remaining strong.
In addition, PNX is progressing evaluation of additional gold prospects that may have the potential to augment overall project returns.
The project feasibility study (FS) and development approvals process will continue to be fast-tracked by PNX.
Multi-asset development
Fountain Head hosts a resource of 2.94 million tonnes at 1.7g/t gold for 156,000 ounces gold.
In addition, material quantities of gold and silver contained in oxide mineralisation at Mt Bonnie will be assessed in the FS along with the now preferred processing route of a conventional gravity, milling and carbon-in-leach (CIL) plant.
The expanded FS aims to confirm the technical and economic viability of the project as Stage 1 of a multi-asset development, with the Hayes Creek zinc-gold-silver sulphides to follow as Stage 2.
Both Fountain Head and Hayes Creek are situated on 100% owned Mineral Leases and are near each other within a historical mining area that contains existing haul roads, water, rail, gas, grid power and telecommunications infrastructure.
Next steps
- Continue discussions relating to infrastructure funding with prospective parties, including HC and BCM, if appropriate.
- Finalise evaluation of known gold prospects in the region (so-called ‘stranded assets’) which have the potential to augment the Project by providing additional feed material to the proposed plant, thereby increasing project life and lowering amortised capital costs.
- Finalise assessment of currently available and suitable 2nd hand CIL plant and equipment which may result in considerable Project capital cost savings.
- Follow up initial discussions in order to finalise modifying the Project Government and Environmental approvals to include change in the processing methodology.
- Advance exploration activities on gold targets within the company’s significant exploration tenure within the Pine Creek region with the aim of providing a continuing series of gold mineral resources to process at Fountain Head.