Nagambie Resources Ltd. has signed a binding term sheet with Alkane Resources for a proposed joint venture covering the Nagambie mine in Victoria and Alkane’s Costerfield mine operations.
Under the terms of the agreement, Alkane would be able to earn up to 80 per cent interest in the tenements if it expends AU$27.5 million in expenditure, with Nagambie retaining the remaining 20 per cent interest. Alternatively, Alkane could earn a 60 per cent interest by funding AU$12.5 million.
On completion of the earn-in, the company will formalise an unincorporated JV, with Alkane managing the project.
The new JV will focus on exploration drilling and potential mine development at Nagambie mine, and in the event of exploration success, the potential trucking of ore to the Costerfield treatment plant for gravity-gold recovery and the production of saleable antimony-gold flotation concentrate.
Nagambie Chair Kevin Perrin said: “We have long considered that the obvious synergies between our high-grade antimony-gold discovery at the Nagambie mine and Alkane’s Costerfield mine operations could lead to a win-win joint venture for both parties.
“Separated by only 40 km of good bitumen road, being able to access the existing Costerfield operations expands the potential resources that can be processed at the Costerfield treatment plant and provides an opportunity to extend or expand the Costerfield operations.
“In summary, Nagambie now has a clear pathway to future very significant cash flow from its share of the potential ANJV antimony and gold production, while avoiding the great majority of capital costs and operating risks associated with a new mine.”
Alkane will also subscribe for AU$2.5 million of Nagambie shares, equal to 166.667 million shares at 1.5 cents per share. Alkane will become a significant shareholder in Nagambie, holding a 13.6 per cent stake.
Nagambie retains 100 per cent of the Whroo mines gold-antimony project and 100 per cent of the Wandean gold-antimony project.
