Emmerson (ASX:ERM) unfurls Territory’s gold reserves from Tennant Creek

Emmerson (ASX:ERM) unfurls Territory’s gold reserves from Tennant Creek

March 19, 2024 Off By Jack Baker

Emmerson Resources has unfurled a combined initial probable ore reserve estimate of 524 kilotonnes at 4.7 grams per tonne gold for 79,140 ounces ready for mining at its Tennant Creek joint venture in the Northern Territory.

Pre-feasibility studies are in the books over the Chariot, Mauretania, and Black Snake deposits as part of privately-owned JV partner Tennant Consolidated Mining Group‘s greater plans for regional production.

Emmerson Resources will take a 6 per cent royalty from the deposits, returning $11.6 million based on a lower price used for the estimation and $15.4 million at current spot prices from the initial reserves.

And if a minimum 60,000oz aren’t produced within 5 years of first mining, TCMG will pay Emmerson the difference between that figure and actual gold production.

Emmerson Managing Director Mike Dunbar said the ore reserve was the culmination of considerable  technical work from the company, the TCMG team, and several independent consultants.

“These ore reserves form part of TCMG’s development plans for not only the JV area, but also their own project as part of the revitalisation of gold mining in the Tennant Creek region, which has historically been one of the highest grade goldfields in Australia, with over 5.5 million ounces of gold production,” he said.

“While the initial ore reserves are modest, it is important to appreciate that a number of the high-grade mines in the district started with a modest ore reserve and went on to produce many multiples of the initial ore reserves, including the White Devil mine, which started with a reserve of only 40,000 tonnes and went on to produce over 760,000oz of gold at 14.6/t from 1.6 million tonnes.”

Dunbar said the company believed the initial reserves were only the start and had full expectations the deposits would grow over time, with both the Mauretania and Chariot deposits lying open at depth, and the depth of its own drilling being the only limiting factor.

“Importantly with the initial ore reserve now published, we can clearly see the benefit that Emmerson will receive over time from the strategy of partnering with TCMG, who will undertake the mining and processing of the deposits in return for the 6 per cent production royalty,” he said.

He noted minimum production payments along with the royalty would result in a substantial low-risk return for Emmerson once TCMG was in production.

“With the current cash reserves of approximately $3.8 million and TCMG needing to fund a further $4.1 million of exploration to complete their JV earn-in over the next two years, we are in a very strong financial position to not only continue exploration on the JV area, but also our 100%-owned exploration projects in the Tennant Creek region and our New South Wales projects as well,” Dunbar said.

The eight square kilometre joint venture covering the deposits stands among a greater exploration JV covering an expansive 1800 square kilometres of a Tennant Creek mineral field long established as one of the Northern Territory’s most productive copper-gold districts.

Given its gold is hosted by ironstones and not typical quartz veins, Tennant Creek was one of the last major mineral fields discovered in Australia and is one of the nation’s more enigmatic districts.

And for Emmerson and its JV partner, the reserves are now stamped in the ground and ready to add to Tennant Creek’s legacy of production.

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