Emmerson Resources Ltd‘s (ASX:ERM) strategy of developing gold operations at the Tennant Creek Mineral Field in the Northern Territory is not expected to be impacted by a COVID-19-related delay in NT Bullion’s funding package.
The company has been informed by NT Bullion that due diligence associated with offtake and forward sales agreements has been impacted by COVID-19 protocols.
NT Bullion said that the ability to meet the terms of agreement with Emmerson Resources had been impacted, such as completing the $2 million placement in July.
Late payment penalty applies
Consequently, the penalty clauses for late payment now apply with the full $2 million placement to NT Bullion at 15.4 cents per share, being 10% higher than the 14 cents as previously announced.
The non-refundable deposit of $200,000 from NT Bullion is forfeited.
Emmerson’s managing director Rob Bills said: “The funding delay incurred by NT Bullion will not impact their overall strategy of establishing an integrated exploration, mining and processing hub in Tennant Creek.
“According to NT Bullion, components for the Elmore portable mill are currently being sourced ahead of transportation to their Peko Tails project.”
All other aspects of the deal remain the same and include formation of an exploration earn-in and JV whereby NT Bullion funds the next $5 million of exploration over the Northern Project Area (NPA), including an advanced payment of $1 million, which includes the refund of exploration costs of approximately $400,000 pertaining to the last drill program at Mauretania.
This $1 million prepayment of the first year of the $5 million exploration earn-in by NT Bullion is expected to coincide with completion of the placement.
Also included is a mining JV covering the NPA (excluding Edna Beryl) with Emmerson to receive:
- a 12% gross revenue gold royalty from the Mauretania and Jasper Hills projects, plus 25% profit share of associated cobalt and copper; and
- a 25% profit share from any other mine developed within the NPA in exchange for NT Bullion undertaking the development, mining, and processing.
Exploration is expected to commence on the high-grade Mauretania Gold Project immediately following closure.
Mills scheduled for operation
NT Bullion, through an associate ICA Mining Services Pty Ltd, has an agreement with Elmore Ltd (ASX:ELE) to establish a portable modular mill at their Peko Tailings site.
This will provide a further option outside of the construction of the Territory Resources-owned Warrego Mill.
Emmerson announced the formation of a strategic alliance with Territory Resources in 2018 with the NT Bullion alliance agreement secured earlier this year.
Both these mills are scheduled for operation in late 2020 but are currently held up due to strict NT COVID-19 work restrictions.
Published at Fri, 12 Jun 2020 05:23:00 +0000-Emmerson Resources says NT Bullion funding delay will not impact gold strategy