Emmerson Resources (ASX:ERM) has extended its joint venture with Tennant Consolidated Mining Group (TCMG) to include the Southern Project Area (SPA) of its Tennant Creek landholding.
Together, Emmerson and TCMG will now advance exploration across the northern and southern sections of the Tennant Creek Mineral Field, bringing Emmerson’s gold and copper assets a step closer to production.
Today’s extension provides at least $10.5 million in exploration funding and a substantial royalty guarantee for Emmerson, which has its sights set on constructing a pipeline of shovel-ready mining projects.
Situated in the Northern Territory, Tennant Creek is lauded as one of Australia’s highest-grade gold and copper assets. Emmerson currently boasts a 1,800-square-kilometre landholding within the field.
Strong track record
Emmerson managing director Rob Bills said the partnership extension came as TCMG established its track record and proved to be “a valuable partner” in the field.
“This new joint venture over the Southern Project Area with the Tennant Consolidated Mining Group is a logical extension and consolidation of our alliance on the Northern Project Area.
“TCMG bring access to capital, mining and production expertise which complements Emmerson’s strong exploration and discovery track record.
“Emmerson is encouraged by the diligent, long-term approach being taken by TCMG to realising full value from one of Australia’s premier goldfields.”
The finer details
Emmerson initially partnered with TCMG in November last year, striking a deal to fund exploration over the northern portion of its landholding at Tennant Creek.
So far, the Hong Kong-based asset management firm subsidiary has earmarked $5.5 million to fund exploration across Tennant Creek’s Northern Project Area (NPA).
Under today’s joint venture extension, it will cough up a further $5 million to advance work in the SPA over the next five years.
In exchange, TCMG has the option to earn a 75% stake in both the SPA and the NPA, as long as it provides at least $10.5 million in project funding between now and 2026.
The joint venture partner must also produce a combined 60,000 ounces of gold across both landholdings within five years.
In addition to the exploration earn-in agreement, Emmerson has also inked a small mines joint venture that covers the SPA.
Under this agreement, the ASX-lister will receive a 6% gold production royalty from all small mines. It’s also guaranteed 6% of a minimum 60,000-ounce gold production royalty across both sites.
Finally, Emmerson has established a major mines joint venture, which means it will retain as much as a 40% stake in any discovery with more than 250,000 ounces of gold equivalent.
What’s to come?
Under the new SPA joint venture, Emmerson and TCMG have designed an increasingly drill-intensive program that spans the five-year earn-in period.
JORC resource estimates are slated for several key projects, while TCMG is gearing up to deliver feasibility studies that establish Tennant Creek’s central mill by 2022.