HC will make a capital investment of AUD$40m ($28m) for the development of gold processing infrastructure and associated costs required to fast track the project
PNX Metals has signed a non-binding term sheet agreement with Halifax Capital (HC) and its subsidiary Bridge Creek Mining (BCM) to develop the Fountain Head gold project.
The Fountain Head project is 100% owned by PNX, and is located in the Pine Creek region of the Northern Territory, Australia.
Under the terms of the agreement, HC will make a capital investment of AUD$40m ($28m), for the development of gold processing infrastructure and associated costs required to fast track the project.
PNX will be provided with an option to acquire 100% of the infrastructure for an agreed future price subject to certain closing conditions.
PNX managing director James Fox said: “Through the proposed JV the Company would have a clear path to monetising the Fountain Head gold resource and certainty around a funding solution that minimises dilution for PNX shareholders and significantly de-risks the project.
“Halifax and Bridge Creek are motivated and experienced partners and their involvement as initial owners and experienced operators of the Project Infrastructure will allow PNX to focus on generating a pipeline of additional gold resources for processing through regional exploration within its’ significant tenure in the NT.
“We look forward to working with Halifax and Bridge Creek to finalise the formal JV Agreement and to jointly benefiting from the development of the Fountain Head Gold Project.”
Fountain Head project is expected to begin commercial production in 2021
A joint venture between PNX and BCM will mine and process the mineral resources through the project infrastructure and will equally share the produced gold.
The processing facility is expected to deliver material operating and environmental benefits, along with increased overall recovery than the previously contemplated gold Heap Leaching by PNX.
Commercial gold production from the Fountain Head project is expected to begin in 2021, and is dependent on the receipt of government and environmental approvals, which are underway.
The company said that the proposed capital commitment and JV represent an opportunity to establish the project infrastructure, which is necessary to fast track the development of Fountain Head.
Bridge Creek director Joseph Mills said: “The deal sets a good foundation for both groups, and a clear pathway to capitalise on the strength in the gold market for years to come.
“The opportunity also allows the JV to establish a key piece of infrastructure in the area to not only service our pipeline, but other companies that have stranded assets that haven’t been able to access a gold mill.