Mount Gibson Iron will acquire Northern Star Resources’ 50 per cent interest in the Central Tanami Project Joint Venture (CTPJV), along with 3600 sqkm of wholly owned exploration tenements in the Northern Territory.
The acquisition will give Mount Gibson a dominant exploration footprint of 5700 sqkm in a historically productive gold region.
Mount Gibson CEO Peter Kerr said the acquisition provides a “compelling opportunity to enter the gold sector at an attractive price.”
“Involvement in the Central Tanami Gold Project provides Mount Gibson with an opportunity to leverage the success of its Koolan Island iron ore operation to establish the foundations of a gold production business,” he said.
The CTPJV, a 50:50 unincorporated joint venture between Northern Star and Tanami Gold NL, encompasses 2100 sqkm and hosts substantial infrastructure including a 1.2 Mtpa carbon-in-leach (CIL) processing plant, haul roads, camp facilities, and the high-grade Groundrush gold deposit.
The project holds a current JORC 2012-compliant Mineral Resource of 13.8 Mt at 3.6 g/t for 1.6 million ounces (Moz) of contained gold, with an additional 1.0 Moz in historical JORC 2004 estimates.
Groundrush alone accounts for 1.1 Moz and is expected to form the cornerstone of future development plans. Mount Gibson believes there is strong potential to further increase resources through ongoing drilling and exploration.
The $50 million deal will be funded entirely from Mount Gibson’s internal cash reserves, with completion contingent on several approvals including the Foreign Investment Review Board and consent from the Central Land Council.
Northern Star will continue its JV activities until completion, and Mount Gibson will begin contributing to expenditure above a $3 million threshold during the interim period.
“Given the substantial work that has been undertaken on the project by the CTPJV to date, we intend to work with Tanami Gold to fast track technical studies to position the project for a development decision within the next 12-18 months,” Kerr said.
“We have already commenced the Foreign Investment Review Board application process and look forward to progressing to completion in the coming months.”
Mount Gibson intends to fast-track technical and feasibility studies over the next 12 to 18 months, targeting a development decision as early as possible.
