Tectonic Gold Plc Update on Diamond Mining Project
September 30 2019 - 6:30AM
UK Regulatory
TIDMTTAU
30 September 2019
TECTONIC GOLD PLC
("Tectonic Gold" or the "Company")
UPDATE ON DIAMOND MINING PROJECT
Tectonic Gold plc (TDIM: TTAU) is pleased to announce that its 100% owned
subsidiary Tectonic South Africa Pty Ltd ("Tectonic SA") was earlier this month
invited to tender for a direct land mining contract for mining on its South
African diamond project. As announced on 13 May 2019, the company was planning
to operate under a long-term sub-contract with VAST Mineral Sands Pty Ltd
("VAST") who had previously been granted a land mining contract. Following
successful trial mining and bulk sampling over the last six months the we are
pleased to be offered the opportunity to apply for a mining contract in our own
right on the same terms as the original VAST contract and consequently the
proposed contract with VAST will not be taken to completion.
Highlights:
* Tectonic SA has filed an application to become prime diamond mining
contractor
* Sub-contract with VAST will not be taken to completion, no equity issuance
for the proposed purchase consideration from VAST
* Successful trial mining and bulk sampling completed
* Targeting areas containing in excess of 500,000 carats
* Management estimates average revenues of approximately US$400 per carat
Tectonic SA has responded to an invitation to submit a tender and today filed
an application to become a direct land mining contractor on the Alexkor/RMC
Pooling and Sharing Joint Venture ("PSJV") diamond mine in South Africa.
Tectonic SA has been active on the site over the past six months building a
local team and conducting trial mining on selected areas to provide ores for
bulk sampling. This has enabled the operations team to understand the mining
environment in more detail. The areas tested during this period have resources
reported under the SAMREC code of in excess of 500,000 carats of gem grade
diamonds and these areas will form the core focus of the new contract
operations.
Tectonic SA's management have been active on this site in various capacities
for over 30 years. Their estimates are for average revenues of US$400 per carat
from the grade and stone sizes returned in independent resource testing.
Tectonic SA's testing activities were conducted under an arrangement with VAST
with a view to Tectonic operating as a long-term sub-contractor under VAST's
pre-existing mining contract. With the opportunity of becoming a prime
contractor, the proposed sub-contractor arrangement with VAST will not be
completed. The US$650,000 equity consideration contemplated under the proposed
sub-contract with VAST will not be paid and no further monthly fees or
royalties will be incurred.
A prerequisite for becoming a prime contractor is establishing a compliant
Black Economic Empowerment ("BEE") partnership under South Africa's Broad Based
Black Economic Empowerment Act, No 53 of 2003. Tectonic has successfully
negotiated a BEE partnership with an experienced South African mining and
commodities trading group who will become a 26% equity shareholder via a loan
to purchase scheme which is a common mechanism for supporting local
empowerment.
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.
Mr. Brett Boynton, Managing Director - Tectonic Gold Plc
We are pleased to have the opportunity to upgrade our status to a direct land
mining contract on this project. We have an experienced team and it makes sense
to take full control over areas such as mine planning, health and safety and
rehabilitation works, which were subject to final approval under the proposed
sub-contract. The improved contractual position also gives us additional
financing flexibility.
Diamond prices have softened over the past year and taking a direct contract
enhances the revenues to Tectonic from this project, which was a key
consideration.
We look forward to working with our new empowerment partners and beginning work
under the new contract.
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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