- Gold explorer Emmerson Resources (ERM) is teaming up with NT Bullion over its Tennant Creek projects in the Northern Territory
- Under a deal signed today, NT Bullion will fund $5 million in exploration over the Northern Project Area
- Further, Emmerson will place $2 million worth of shares to NT Bullion at 14 cents each — double their five-day volume-weighted average price
- Emmerson will keep operating its current Tennant Creek projects
- The company will be entitled to a quarter of the profits of other mines constructed by NT Bullion in the area
- Emmerson shares are trading almost 32 per cent higher today, currently worth just under 10 cents per share
Gold explorer Emmerson Resources (ERM) has locked in a lucrative partnership with NT Bullion over its Tennant Creek projects in the Northern Territory.
Under the partnership, NT Bullion will fund $5 million of exploration over the Northern Project Area (NPA) of Tennant Creek. This includes a $1 million advance payment and a $400,000 refund to Emmerson for drilling completed earlier this year.
Moreover, NT Bullion is buying up $2 million of Emmerson shares at double their market value. Emmerson’s share placement to its new partner prices shares at 14 cents each, which is a 100 per cent premium to the company’s five-day volume-weighted average price.
Partners for profits
For Emmerson, the purpose of the new partnership is to both speed up exploration in the NPA area and cover the costs of the work while still allowing Emmerson to bag some royalties.
As part of the agreement, Emmerson is entitled to a 12 per cent gross revenue royalty from the Mauretania and Jasper Hills projects, plus a quarter of the profits from any copper and cobalt found.
While Emmerson will keep operating the current projects in the Tennant Creek Area, NT Bullion will develop, mine, and process any other mines built up in the area, with Emmerson entitled to 25 per cent of their profits.
Emmerson Managing Director Rob Bills welcomed NT Bullion as an earn-in and joint venture (JV) partner.
“This multifaceted deal over the Northern Project Area augments the existing alliance with Territory Resources over the Southern Project Area and is another boost for the local Tennant Creek economy,” Rob said.
“For Emmerson shareholders, it provides a low-risk pathway to accelerate commercial production from a potential suite of new mines in the Northern Project Area,” he explained.
“The premium paid by NT Bullion for their Emmerson shares reflect both their confidence in the future success of the Strategic Alliance as well as their acknowledgement of the proprietary knowledge and relationships that Emmerson hold in relation to the Tennant Creek Mineral Field,” he said.
A foot in the door
As for NT Bullion, major shareholder Roy Jansen said the company is using this Emmerson partnership to construct a gold processing plant in the Tennant Creek area.
“Emmerson has an outstanding land package around Tennant Creek with clear production potential which aligns with our strategy to establish with Elmore a portable modular mill,” Roy said.
“The strategic alliance is part of an overall plan by NT Bullion to develop a range of gold, iron ore, cobalt and copper projects in the NT including a gold processing plant and exporting high-grade iron ore through Darwin,” he added.
Emmerson shares are trading 31.51 per cent higher today, edging towards the 14-cent premium set by NT Bullion. Currently, shares are worth 9.6 cents each.