Gold and tin miner Metals X is set to acquire a 75 per cent interest in the Central Tanami gold project.
The deal will see Metals X take an immediate 25 per cent stake for an $11 million payment and four million shares.
A further 50 per cent will then be earned by sole funding all expenditure costs required to bring the closed mine back into production.
The project, located 550 km northwest of Alice Springs, was put into care and maintenance by Newmont in 2004.
It covers a mining tenure of 2,268 square kilometres of highly prospective geology which has been actively mined in 43 separate open pits from the 1980s.
The operation’s Groundrush underground resource estimate is 6.72 million tonnes at 4.8 g/t Au containing 1.04 million ounces of gold and will become the initial mining priority for Metals X.
Tanami was advancing the project toward production until 2012 when financial difficulties curtailed the project. The majority of the previously operated 1.2 mtpa CIP plant and associated infrastructure remains in place but requires modest refurbishment and additions to bring into working order.
CEO Peter Cook described the deal as “yet another cracking acquisition by Metals X”.
“It creates another opportunity for our team to showcase our skill base in the turnaround of operations,” Cook said.
“The Central Tanami Project is an outstanding land package with significant resource base and infrastructure in place.
“The coincidence of the falling Australian dollar exchange rate, lower fuel costs and a re-invigorated interest in gold by investors and central banks all bode well for Metals X, this project and our rapidly expanding gold division.”