- Prodigy Gold has entered an operator agreement with TRL Tanami to develop and mine the Old Pirate Project under a strategic 10-year operator agreement
- Subject to terms, TRL Tanami will become the mining operator of Old Pirate
- Additionally it can complete a staged earn-in agreement to acquire 100 per cent of the Buccaneer Gold prospect in the Tanami region
- The agreements are in line with Prodigy’s strategy to reduce portfolio holding costs and continue exploration at its other projects
Prodigy Gold has entered an operator agreement with TRL Tanami to develop and mine the Old Pirate Project under a strategic 10-year operator agreement.
TRL Tanami will pay Prodigy Gold an initial $200,000 plus pro rata tenement cost within 14 business days and an additional $301,412 within two weeks of TRL Tanami being appointed operator.
This will see the company obtaining authorisation and approved mining management plant to explore and mine mineral deposits at the project.
Additionally, TRL Tanami is to pay over $1.7 million by January 31, 2020, for the replacement of security bonds.
Prodigy Gold will retain a 2.5 per cent net smelter royalty (NSR) overall future production from the Old Pirate Project during the 10-year agreement term.
“This is another high value accretive transaction for Prodigy Gold and consistent with our strategy of unlocking value in our projects. The transaction with TRL Tanami is structured in such a way that it delivers upside for both parties,” Prodigy Gold Managing Director Matt Briggs said.
The agreement also enables TRL Tanami to enter an exclusive three-month option period over the Buccaneer Gold deposit for $2 million. This will allow TRL Tanami to complete a staged earn-in of up to 100 per cent into the project for an additional $15 million. Prodigy will retain a 1 per cent NSR on all production.
Old Pirate is located in the Tanami region of the Northern Territory. In 2016, CSA Global estimated remaining Indicated and Inferred Mineral Resources to be 760,000 tonnes at an average grade of 4.7g/t for 114,900 ounces of contained gold above a 1.0g/t cut-off.
The Buccaneer prospect lies within the Twin Bonanza Project and is adjacent to Old Pirate. It has been independently modelled at 10 megatons at an average grade of 1.8g/t for 585,000 ounces of contained gold above 1.0g/t lower cut-off.
“The potential redevelopment of the Old Pirate and Buccaneer Projects is an exciting step forward for the Tanami district and once operational will also provide potential scope for Prodigy Gold to tribute or toll treat its nearby projects,” Matt continued.
Prodigy sees this agreement as being highly in line with its strategy to monetise Twin Bonanza and significantly reduce portfolio holding costs.
The gold company will utilise the funds to continue its exploration programs and meet its expenditure commitments at programs undertaken across its Euro Gold, Lake Mackay and Bluebush projects.