Tempest Minerals Ltd (ASX:TEM) has inked a conditional agreement with Lole Mining Ltd to acquire the company’s assets in Papua New Guinea, including the Tolukuma Mine – which historically produced more than 1 million ounces of gold and holds the potential to elevate Tempest to gold producer status.
The acquisition involves an equity transaction of $25.69 million in value, in multiple stages conditional on successful due diligence, shareholder approval, and a capital raise to support the transaction.
The Tolukuma mine was historically operated as a high-grade gold and silver producer, and still holds a large non-JORC resource. Tempest expects infrastructure replacement costs in the order of $200 million to restart the mine.
“Fantastic opportunity to drive growth”
“This is a major milestone development for Tempest and our shareholders,” Tempest Minerals managing director Don Smith said.
“In line with the company strategy of sustainable discovery and development, we are pushing full steam ahead with our exploration fronts at the Meleya and other Yalgoo regional projects in Western Australia.
“At the same time, we have identified this fantastic opportunity to drive growth by positioning ourselves as a near-term gold producer with associated revenue stream and by adding high potential exploration ground to the portfolio.
“Many of the current TEM team have previously been mine developers and we are really excited to work with the great team at Lole and look forward to generating value through this transformative deal.”
Tempest asserts that this acquisition de-risks shareholder investment, as TEM is now developing assets in multiple jurisdictions, holds near-term gold production potential, and now has the opportunity for ‘huge’ exploration potential within a 2,000 square kilometre portfolio.