PNX Metals Ltd (ASX:PNX) (FRA:4P1) has signed a non-binding term sheet with Ausgold Trading Pty Ltd to acquire the Glencoe Gold Deposit in the Northern Territory for total staged consideration of $1.875 million.
This acquisition represents an opportunity to acquire a bolt-on asset that has the potential to significantly expand the Fountain Head gold development.
The Glencoe Mineral Leases are less than 3 kilometres north of PNX’s 100%-owned Fountain Head project, which hosts a JORC 2012-compliant resource of 2.94 million tonnes at 1.7 g/t gold for 156,000 ounces.
These projects are about 170 kilometres south of Darwin in the Pine Creek gold region of the Northern Territory.
Looking forward to exploration
PNX managing director James Fox said: “The Glencoe gold deposit lies on the same structural trend and within 3-kilometres of Fountain Head.
“It represents the first of many opportunities PNX has identified with the potential to significantly add to the company’s existing gold resource base and to generate additional flexibility in its development strategy.
“We look forward to working with Ausgold to complete the acquisition, and to commence on-ground exploration drilling where the potential exists to materially increase the scale of historically defined gold mineralisation.”
Mineralisation at Glencoe
Gold mineralisation at Glencoe has been defined within four main mineral lodes over an approximate 500-metre surface strike extent that remains open at depth and along strike.
Limited historic reverse circulation (RC) drilling with a maximum depth of around 30 metres displayed multiple high-grade gold intercepts that represent targets for new extensional lode positions.
The historic gold resource at Glencoe remains open with strong exploration potential and numerous high-grade gold intercepts including:
- 6 metres at 3.40 g/t gold from 45 metres in mid-central lode;
- 12 metres at 1.82g/t from 25 metres in north-central lode; and
- 2.7 metres at 28.38g/t from 25.5 metres in west lode.
The company plans to start drilling after the NT wet season in a bid to upgrade the historic resource to JORC 2012 compliance.
Key terms of non-binding term sheet
PNX to pay Ausgold a total of $1.875 million comprising;
- Fully-refundable option payment of $500,000 to be paid on or before December 10, 2020;
- Staged payment of $675,000 to be paid upon execution of a formal sale and purchase agreement, expected to be completed by January 29, 2021;
- Payment of $700,000 within 12 months of receiving FIRB approval but no later than December 31, 2021, of which $200,000 may be paid in PNX shares; and
- Certain conditions precedent to completion are also required such as PNX obtaining FIRB and in principle ministerial approval.