The area was identified through PNX’s prefeasibility study primarily because of its proximity to the mining areas at Iron Blow and Mt Bonnie in the Northern Territory.
This development comes at a time when PNX is on the verge of completing its definitive feasibility study and updating its resource.
Close to existing infrastructure
There is also existing infrastructure including high-voltage power, rail, gas, water and roads in close proximity.
Another factor working in its favour is the existence of established open pits proposed for use as tailings storage.
James Fox, managing director, said: “The benefits of the area are significant for the project as it is the preferred location for the Hayes Creek process plant and tailings facility.
“This site was contemplated in our PFS due to it being located on granted MLs with excellent infrastructure and in close proximity to the mining areas at Iron Blow and Mt Bonnie.”
100% ownership of Hayes Creek Project also confirmed
As part of the Fountain Head Mineral Leases agreement, PNX will also take 100% ownership of the Moline Exploration Project.
The Moline exploration project is considered to be highly prospective for gold and base metals.
Fox said: “Acquiring the remaining 49% of the Moline Project is also an excellent outcome as it contains a number of strong zinc and gold exploration targets.
“We look forward to drilling these during 2018.”
Under previous terms, the project was 51% owned by PNX through a farm-in agreement with KL Gold, part of Kirkland Lake.
PNX carves out three exploration areas at Burnside Project as consideration
In return for the acquisition of Fountain Head and balance of the Moline Project, PNX has agreed to carve out three exploration areas within the Burnside project area.
These are also part of the farm-in agreement and 51% owned by PNX, and the transfer will allow KL Gold to continue with its regional gold exploration program in those areas.