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Ark Mines has been forced to terminate an agreement to operate Prodigy Gold’s Old Pirate project after it was unable to find a debt funder.

Ark (ASX:AHK) share price was steady on the news, but Prodigy (ASX:PRX) jumped almost 16 per cent to 8.1c­­­.

Prodigy — which changed its name from ABM Resources earlier in the year — has grappled with issues at the Old Pirate mine in the Northern Territory since 2015.

In 2015, Old Pirate was going to be developed into a high-grade, high-margin gold mine (with a resource of 640,000oz gold grading 11.7g/t) that would catapult Prodigy into production.

Anything above 5g/t is considered high grade.

It was meant to produce up to 60,000oz on its first year, but managed only 29,376oz between March 2015 and March 2016.

The mine was shut by April after failing to deliver to amount of gold promised.

Prodigy Gold (ASX:PRX) share price over the past year.
The Prodigy Gold (ASX:PRX) share price over the past year.

Prodigy Gold Managing Director Matt Briggs said Prodigy Gold was now in a position to consider other paths to value, while continuing to aggressively explore its other projects.

“Depending on market conditions this may be through an operator agreement with Ark Mines or other parties,” he said.

Ark has also had a rough trot.

The explorer was preparing to mine its Mt. Porter gold project in the Northern Territory before increased third party processing costs made the project uneconomic.

It couldn’t fund its own processing plant, so the company established a mining agreement with Prodigy over Old Pirate – a project that had in place a processing plant and all relevant permissions to start mining almost immediately.

Ark told investors it would now continue to look at other mining opportunities.