Sand mining company Diatreme will sell its Tick Hill Gold Project to a new gold resources float called Carnaby Resources.
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Tick Hill, located 110 kilometres south-east of Mount Isa, was previously mined by open-pit with an underground mine beneath the pit.
Mining at Tick Hill ceased in 1995 after 513,333 ounces of gold and 705,000 tonnes of ore was produced at a recovered grade of 22.6 grams a tonne gold but exploration resumed in 2016 under a Diatreme Joint Venture.
Under the new deal Carnaby will issue up to 4.5 million ordinary shares at 25c to Diatreme valued at to $1.125m and Diatreme will receive 3,225,000-4,500,00 shares dependent on a successful upcoming public float by Carnaby, 4.5% of the total capitalisation of Carnaby.
Diatreme’s Tick Hill JV partner, Superior Resources will also sell its interest for between one to one and half million shares valued at $375,000, 1.5% of the total capitalisation of Carnaby.
Superior’s current interest in the Project is an earn-in interest under an Exploration Farm-in and Joint Venture Agreement with Diatreme and they may earn a 50% interest in the project by spending a minimum of $750,000 on exploration, paying Diatreme $100,000 and paying 50% of the environmental bond of $298,000.
Superior has spent around $350,000 on the project and has not met its earn-in requirements. However Superior now holds a 50% interest in the surface gold, mainly the residual gold in the Tick Hill Tailings Ponds.
A scoping study and additional work by Superior last financial year did not find a way to viably extract the residual gold contained in the tailings.
Diatreme’s CEO, Neil McIntyre, described the agreement as a win-win outcome for shareholders, providing the potential benefits from the IPO and Carnaby’s future exploration work at no cost to the Company.
“With Tick Hill’s history of successful gold production and recent high Australian dollar gold prices, it represents an attractive asset to Carnaby, which has put together a number of gold assets for its upcoming float on the ASX,” Mr McIntyre said.
Mr McIntyre said Carnaby’s technical team and management have a successful track record in progressing gold projects from exploration to mining, with a unique insight into the Tick Hill tenements and the region.
The agreement with Carnaby is subject to successful completion of the IPO within 120 days of signing.
Derek Barry
Editor of the North West Star Mount Isa since January 2016. Prior to that, an editor at several regional southern Queensland newspapers. Passionate about telling local stories. Comes with a strange accent to due an Irish accident of birth.
Editor of the North West Star Mount Isa since January 2016. Prior to that, an editor at several regional southern Queensland newspapers. Passionate about telling local stories. Comes with a strange accent to due an Irish accident of birth.
