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PNX Metals reaches farm-in milestone after raising funds

Published: 09:10 16 Dec 2016 AEDT

PNX-Metals-MD-James-Fox-presenting-Melb-Aug-2016
James Fox, managing director, presenting on a Proactive roadshow this year.

PNX Metals (ASX:PNX) has completed the first stage of its farm-in agreement gaining a 51% interest in 1,700 square kilometres of land in the Pine Creek region of the Northern Territory.

The agreement with Newmarket Gold encompasses the Burnside, Moline and Chessman projects and excludes their uranium rights.

PNX has now elected to proceed to the second stage of the farm-in whereby it can increase its interest in the 19 exploration licences and 4 mineral leases to 90% through $2 million expenditure by 15 December 2018.

The Burnside, Moline and Chessman projects contain opportunities for brownfield discoveries and surround the flagship Hayes Creek gold-silver-zinc project.

PNX also secured commitments to raise $2.6 million in an oversubscribed share placement earlier in the week.

James Fox, managing director, commented: “With our well-supported and successful capital raising earlier this week and excellent assays results from initial Moline drilling, the company is well positioned for follow-up during the 2017 dry-season.”


Background

PNX’s focus is on its four projects located in the Pine Creek Region, 180 kilometres south of Darwin.

- Hayes Creek Project (flagship);
- Burnside Project;
- Moline Project; and
- Chessman Project.

The Hayes Creek project contains the Iron Blow and Mt Bonnie gold-silver-zinc deposits, located less than 3 kilometres apart and situated on granted mineral leases wholly owned by PNX.

The Hayes Creek pre-feasibility study is fully funded and due for completion by May 2017.

It will expand on the scoping study completed in March 2016, which found that mining and processing ore derived from the proposed open-pit and underground operations at Hayes Creek would generate strong financial returns for PNX.


Recent capital raising

Earlier this week PNX secured commitments to raise $2.6 million in an oversubscribed share placement priced at $0.02.

Subject to shareholder approval, investors will also receive a 1:2 unlisted option exercisable at $0.05 and expiring 30 May, 2019.

The funds raised will be used to accelerate the work program related to government and environmental approvals for the flagship Hayes Creek project and further drilling and metallurgy at the newly discovered Southern Gossan at Mt Bonnie.

Additional regional exploration will focus on the Moline project.


Moline recent drill results

A total of 12 reverse circulation holes were completed for 1,497 metres during November.

Assays from two holes drilled beneath a historical open-pit at the School prospect include:

- 9 metres at 2.66 g/t gold from 68 metres in the western lode; and
- 7 metres at 11.89 g/t  gold from 115 metres in the eastern lode including 3 metres at 23.79 g/t gold.

Drilling has observed at least two main lodes, comprising a western and eastern lode.

Mineralisation is open in all directions, providing significant scope for further exploration success.


Analysis

Entering the next stage of the farm-in over the Burnside, Moline and Chessman projects along with raising $2.6 million mark the completion of two significant milestones for PNX this week.

The farm-in agreements provides PNX with important exploration projects to advance while the flagship Hayes Creek project works towards completing a pre-feasibility study by mid-2017.

Initial drill results from the Moline project have already shown new high grade gold mineralisation with the potential of defining a shallow resource.

With base metal associations identified in historical data, Moline shows synergies with the nearby flagship Hayes Creek project.

PNX remains leveraged to exploration news flow over the short term with assays from the other completed holes at Moline expected shortly.

Shares in PNX are up 160% year to date, currently trading at $0.026.

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