Tectonic Gold Plc Acquisition of VAST JV
May 13 2019 - 2:01AM
UK Regulatory
TIDMTTAU
13 May 2019
TECTONIC GOLD PLC
("Tectonic Gold" or the "Company")
Acquisition of Diamond mining contract
Tectonic Gold plc (TDIM: TTAU) is pleased to announce that it has restructured
the diamond mining joint venture previously announced and that the Company's
100% owned subsidiary, Tectonic South Africa Pty Ltd ("Tectonic SA"), is taking
full operating control and a 100% economic interest in the VAST Mineral Sands
Pty Ltd ("VAST") diamond mining contract. VAST remains a partner via the equity
consideration in Tectonic Gold previously agreed and a production royalty on
the contract.
Highlights:
* Tectonic Gold has, as of 1 May 2019, taken operational control of the VAST
land mining contract
* Intention to self-fund all future gold exploration activities from project
cash flows
* New subsidiary, Tectonic SA, established
* VAST diamond mining team transferred to Tectonic SA
* Equipment leases transferred to Tectonic SA
* Consideration includes the original JV consideration announced 18 January
2019 and a 3% royalty on gross diamond sales
* Tectonic SA to reimburse VAST for provision of on-going support to meet
contract compliance in rehabilitation, health and safety and security.
Following the initiation of mining under the joint venture agreement with VAST,
the mining team completed bulk sampling in a number of areas with recoveries
from all samples showing grade and average stone size above expectations.
Tectonic Gold has subsequently reached agreement to take full control of the
project as exclusive subcontractor with the VAST diamond mining team moving to
Tectonic SA effective immediately.
Restructuring the 19 April 2019 joint venture into a subcontract gives the
Company operational autonomy in on-going development, equipment financing and
planning the expansion of diamond mining operations.
The existing diamond mining team is being transferred to Tectonic SA together
with all the equipment currently leased. This has enabled a transition with no
operational interruptions to on-site activities.
VAST remains a major on-site presence with their other interests and will
continue to support Tectonic Gold as a significant shareholder and Tectonic SA
as their exclusive subcontractor.
The Company has identified plant and equipment required for expansion of our
mining operations. This is currently planned to occur in two stages with the
first stage targeting 950 carats per month production and the second increasing
production to a minimum of 1,500 carats per month. The Company is in advanced
discussions with equipment lease finance providers to acquire the required
plant and equipment.
About Tectonic Gold:
Tectonic Gold is a specialist gold exploration company, focused on the
identification and delineation of large-scale, multimillion-ounce Intrusion
Related Gold System ("IRGS") assets. Tectonic Gold holds a number of gold
discoveries in the New England Orogen in Eastern Australia, a prolific gold
region that is home to Australia's two largest gold production companies,
Newcrest Mining and Evolution Mining.
A successful diamond drilling campaign in 2018 on the Company's flagship
"Specimen Hill" project has confirmed a large diatreme IRGS system similar to
regional multi-million ounce deposits such as Kidston and Mt Rawdon. Tectonic
Gold intends to apply the cash flows from the diamond mining operations to
further drilling at Specimen Hill under an existing drill for equity deal with
Titeline Drilling. 7,500m of diamond drilling remains available on a 50% cash
payment basis under this agreement.
Funds will also be allocated to progressing the Company's Mt Cassidy prospect
during the 2019 calendar year.
Mr. Brett Boynton, Managing Director - Tectonic Gold Plc
This transaction gives us full control over a considerable and readily
accessible diamond resource. We have been very encouraged by the grade and
stone size coming from our initial bulk testing. In order to maximise the
opportunity, we have worked with VAST to restructure our original deal and take
full control over the operations. This has enabled us to advance
equipment-financing discussions and more confidently plan the mine development,
leading to increased production and revenues.
The strategy remains to fully fund for all of our gold exploration programs
from internal production and this transaction gives the Company a strong
platform to achieve that. It also puts us on a firmer footing to create
liquidity in our share register and encourage interest from new investors.
Qualified Person:
Mr Jonathan Robbeson - BSc (Hons1), MEconGeol, MMinEng, (CP Geo) is a full-time
employee of Signature Gold Limited and is a registered Chartered Professional
(Geology) with the Australian Institute of Mining and Metallurgy (AusIMM -
304542). Mr Robbeson has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and the activity being
undertaken to qualify as a Competent Person as defined in the Note for Mining
Oil & Gas Companies, June 2009, of the London Stock Exchange and the 2012
Edition of the 'Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves' (JORC Code). Mr Robbeson consents to the inclusion
in the release of the matters based on his information in the form and context
in which it appears.
The Directors of the Company accept responsibility for the contents of this
announcement.
For further information, please contact:
Tectonic Gold plc +61 2 9241 7665
Brett Boynton
Sam Quinn
www.tectonicgold.com
@tectonic_gold
NEX Exchange Corporate Adviser and
Broker +44 20 7469 0930
Peterhouse Capital Limited
Mark Anwyl
Financial Adviser and Broker
VSA Capital Limited +44 20 3005 5004
Andrew Raca - Corporate Finance
Andrew Monk - Corporate Broking
Ends
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014. Upon the publication of this announcement via a Regulatory
Information Service, this inside information is now considered to be in the
public domain.
END
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