JOHANNESBURG (miningweekly.com) – Joint venture (JV) partners Emmerson and Evolution Mining have agreed to restructure the Tennant Creek JV gold project, in the Northern Territory, to better align assets with the respective companies.

Emmerson MD Rob Bills said on Monday that the company would retain a significant exploration tenure of about 2 600 km², or 94% of the previous JV area, which is considered highly prospective for new discoveries.

Emmerson would retain all gold dominant projects, small mines and associated exploration ground, and a 100% interest in the tribute mining agreement at Edna Beryl.

Evolution would forego its right to a 65% interest in the entire JV area, instead taking a 100% interest in an area of the JV that contained the Gecko, Goanna and Orlando copper/gold prospects.

“The proposed restructure better aligns the assets with the respective companies. It provides Emmerson shareholders with near-term, high-margin gold assets and exploration ground that can be more easily developed within the constraints of the Emmerson balance sheet.

“Importantly, the investment in new data during the term of the JV has provided new insights into what we believe is a new generation of high grade, hematite-hosted gold deposits,” Bills noted.

“As we looked to move to the next phase of exploration at Tennant Creek, it became clear that our strategic imperatives were not aligned with those of Emmerson. However, a subdivision of the ground holding, as proposed, will allow both parties to take a 100% interest in their preferred prospects,” commented Evolution VP for discovery and chief geologist Glen Masterman.

“This is a smart outcome for both parties. We remain a significant shareholder of Emmerson and wish them success with their ongoing exploration.”

Under the restructure, Emmerson would retain 100% (instead of 35% under the current terms) of all the gold dominant assets, prospects and associated exploration ground of the Tennant Creek Mineral Field JV.

“Tennant Creek is one of Australia’s highest-grade goldfields and is where Emmerson and partners have made the first new discoveries for over a decade. These discoveries have been underpinned by a substantial investment by Evolution in acquiring new data, along with the application of new exploration tools, directly leading to the discovery of a new generation of hematite hosted, high grade gold projects such as seen at Edna Beryl and Mauretania,” said Bills.

“This data and in-house knowledge from testing and trialling of new concepts and technology remains with Emmerson, as do all the other assets such as the Tennant Creek exploration base, Warrego mill and extensive drill core library. This enables Emmerson to easily scale up exploration and operations around its small mines and attract potential new joint venture partners.”

Under the restructure, Evolution will take a 100% holding in the tenements (or parts of them) that contain the Gecko, Goanna, and Orlando copper/gold prospects, constituting some 6% of the entire Tennant Creek land position.

“These prospects are predominantly copper rich, but have potential for gold grades to increase at depth. Further exploration of these prospects will require deep drilling.”

Further, Emmerson believes there is exploration upside at Edna Beryl, but like many of the historical mines in the field, will require higher density drilling that is best achieved from underground.

“Bulk sampling of ores mined to date from the 90-m-level development drive (within the tribute area) assayed more than 35 g/t gold. These bulk samples are statistically more representative of the likely overall grade and continuity than the surface drill holes, providing great encouragement for undertaking further underground development and drilling.”

Further, Emmerson is accelerating the permitting and development of the remainder of the small mines, with the Black Snake project the most advanced, and the largest being Chariot–with a resource of about 100 000 oz of gold at a grade of 17.4 g/t.

First production from a portion of the Edna Beryl mine was announced in December 2017. Since then, plans have progressed for the commercial production from the tribute area, which includes full scale mining and processing.

As previously announced, Emmerson receives a “risk free” income stream via a royalty agreement with the specialist small scale miner, the Edna Beryl Mining Company.

This restructure will see Emmerson retain full control of the small mines and receive 100% of the revenue stream from the royalty (proportional to the amount of gold produced).

The other small mines can be considered exploration targets, adding a further 160 000 oz to 180 000 oz of high grade gold at 15 g/t to 20 g/t as indicated from the historical reports.

“Both companies have negotiated the proposed restructure in good faith and remain confident that it is in the best interests of both parties. If, however, shareholder approval is required but is not obtained, then Evolution will elect to earn a 65% interest in the whole of the Tennant Creek as provided for under the current terms of the Tennant Creek joint venture,” concluded Bills.