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News: Metals X to acquire Central Tanami Gold Project

  1. Tin and gold miner Metals X (ASX:MLX) will acquire a 75% interest in the Central Tanami Project from Tanami Gold (ASX:TAM) in a staged earn-in with an initial payment of $11 million cash.

    The project is located in the Tanami Desert of the Northern Territory, 550 kilometres northwest of Alice Springs.

    Metals X is Australia’s largest tin producer and a top 10 gold producer.

    The binding heads of agreement will see it gain an initial 25% stake and issue four million fully paid ordinary shares.

    A further 50% can be earned in the project by sole funding all of the expenditure and costs required to bring the project back into commercial production.

    Commercial production is deemed when the CTP process plant has been refurbished and is operated for a 30 day period or has produced 5,000 ounces of gold.

    Metals X will manage and operate the venture. It will also grant Tanami a put option to sell all its remaining interests in the project for $32 million in cash or shares in Metals X.

    With the acquisition, gold is fast becoming a driver for Metals X, providing it with an opportunity to turnaround the challenged project.

    The project has a good resource base and significant infrastructure in place and could see a high production rate and competitive costs and quick re-start of operations with the funding and management in place.

    Tanami has previously announced a resource base for the CTP of 25.5 million tonnes at 3 g/t gold containing 2.625 million ounces of gold.

    However, within this Total Resource, the Groundrush underground resource estimate is 6.72 million tonnes at 4.8 g/t gold containing 1.04 million ounces of gold.

    Tanami was advancing the project toward production until 2012 when financial difficulties curtailed the project.

     


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