The alliance forms a mining and exploration joint venture over 25% of Emmerson’s Tennant Creek landholding, an area known as the Southern Project Area (SPA).
The alliance will facilitate the construction of a modern processing mill, fast-track the development of Emmerson’s small mining projects and provide funding for SPA exploration.
TTY commits to building new mill
Emmerson has entered into a binding agreement to sell its mothballed Warrego Mill and Mining Lease 30888 to TTY in exchange for TTY building a 300,000 tonnes per annum CIP mill.
The modular nature of the processing facility under construction means TTY expects the plant to be in operation by the end of 2018 or early 2019.
Alliance includes $2 million placement
As part of the alliance, TTY has subscribed for 19.3 million Emmerson shares priced at 10.35 cents, representing a 56.82% premium to the last traded price.
The investment will raise $2 million in two $1 million tranches, which will support Emmerson’s ongoing exploration activities.
Alliance to accelerate mining and processing
TTY is an experienced mining and processing operator with a successful track record at other sites around Australia.
Emmerson and TTY have negotiated profit share and gold royalty agreements pertaining to the development and mining of potential mining projects within the SPA.
Mine planning and scheduling by TTY are well underway, with a number of both open cut and underground mines planned concurrently.
Emmerson’s managing director Rob Bills said: “The structure of the Mining and Processing Agreement will see Emmerson receive a 25% profit share from the mining operations except for Edna Beryl and Chariot, where Emmerson will be entitled to a portion of the gold ore produced (12% and 6% respectively).”
Bills added: “For Emmerson shareholders, it provides a low-risk pathway to commercial production from our smaller mines and importantly will generate funding for ongoing exploration programs in the Northern Territory and New South Wales.
“The A$5 million earn-in funding being provided by TTY for the Southern Project Area will further build the pipeline of mining projects to feed the new milling facility under construction by TTY.
“This Strategic Alliance and milling facility will see the re-establishment of Tennant Creek as an integrated exploration, mining, and processing hub – thus realising Emmerson’s long-held vision and that of the NT Government.”