Ark Mines has agreed to become the operator of the Old Pirate gold mine in Tanami, Northern Territory following an agreement with owner ABM Resources. Ark Mines will pay $2.2 million to ABM — which is attempting to tighten up its NT gold interests — in cash and bonds and has also agreed to a 2.5 per cent net smelter royalty (NSR) on gold sales above $5 million.
Ark will pay a deposit of $50,000 within seven business days, and negotiate an operator agreement to a 10-year period. Ark Mines, best known for its Mt Porter and Frances Creek projects in the gold-laden Pine Creek region of NT, represents a significant expansion for the company.
As part of its negotiations with ABM, Ark also has a 60-day exclusivity window in which it can purchase the nearby Buccaneer project, which is to the north of the Old Pirate project.
According to Matt Briggs, ABM managing director, Ark not only provided the most attractive terms for Old Pirate, but also had the requisite experience to make it a success.
“The Old Pirate project requires intense geological and mining study to be successful,” he explained. “ABM is aggressively exploring its portfolio of large-scale gold targets in the Tanami region and when the potential of the targets currently being drilled is compared to the small scale of Old Pirate, the high holding costs are no longer justified without an imminent intention to mine.”
The Old Pirate deposit hosts indicated and inferred resource estimates of 760,000t at 4.7g/t of gold, which translates to 114,900oz of gold above a 1g/t cut-off (according to figures from mining consultancy CSA Global). Previously, ABM operated five pits at Old Pirate from March 2015 to March 2016, achieving results of 29,376oz of gold from 155,357t graded at 5.9g/t of gold.
Roger Jackson, managing director of Ark, said that the deal would allow the company to start producing gold as soon as possible while it is still developing its own projects, in particular plans for a plant at Pine Creek’s Union Extended mining region.
“We continue to work hard on all these facets,” he said. “In the meantime, we don’t want to stand still. We want to start producing gold as soon as we can. The Old Pirate project gives us that opportunity from an existing open cut pit and access to an established and proven gold processing plant.”