ASX-listed exploration company PepinNini Lithium Ltd (PNN,) say they have bought the Gilded Rose Gold Mine Project in Cloncurry from Ausmex Mining in a $4m deal with a view to restarting mining next year.
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The acquisition, 15km east of Cloncurry, includes four gold mining leases, one exploration licence and a dormant gold (Carbon in Pulp) processing plant with a design capacity for the processing of 60,000 tonnes a year.
PNN have paid an upfront non-refundable fee of $20,000 and on completion of due diligence will pay a further $80,000.
PNN will pay $1,400,000 cash on transaction completion targeted for June 30, 2020 and there will be a $1,000,000 scrip payment in listed shares following completion, at an agreed issue price of $0.002 per share.
The deal will also see a $500,000 cash payment, payable 18 months following completion, currently targeted for the end 2021 and a $1,000,000 milestone cash payment is due upon 10,000 Oz gold production.
PNN will carry out due diligence on the project, including the mining equipment, resource, historical data and mining, tenement standing and environmental factors.
A formal transaction document will be negotiated and agreed, with transaction completion conditional on conclusion of due diligence (scheduled to end May 21 subject to any delay caused by Covid-19) and a capital raising of $2 million.
PNN said it then planned to raise further capital to begin gold production at Gilded Rose and upgrade the gold resource to JORC 2012 in the area that would be suitable for open pit mining.
They will also review drilling by previous owners and possibly carry out further drilling to enlarge and extend current gold resources.
They will re-condition the gold processing plant and equipment and undertake mine planning for an initial open pit followed by a potential underground operation for deeper resources.
PNN said they want to commence mining at Gilded Rose in 2021.
"Gold is a safe investment in the current global health crisis due to Covid-19," the company said in a statement.
"Currently the gold price is US$1709 and on 20 January this year it was US$1559 so there has been an increase since the beginning of the year."
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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.
