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PNX cements $1.8m cash sale of Moline project
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PNX Metals will add $1.8m in cash to its coffers after Sovereign Metallurgical decided to go ahead with the purchase of the company’s Moline project.
PNX Metals (ASX:PNX) has finalised a high-value deal with Sovereign Metallurgical that will see it sell its Moline project for $1.8m in cash but still retain upside exposure to the asset, leaving it free to focus on its flagship Fountain Head gold project that recently received environmental approval.
As part of the deal, PNX will retain a net smelter royalty of 1% over any gold or silver and 2% over any other metals eventually produced from the Moline project.
“The divestment of a non-core asset realises immediate value for PNX and allows the company to focus on the development and further exploration of its 100% owned Fountain Head gold, and Hayes Creek gold, silver and zinc projects located in the Pine Creek region of the Northern Territory,” managing director James Fox said.
The agreement also provides the company with a first right of refusal to toll treat any gold or silver mineralisation produced from Moline through the Fountain Head processing plant.
The sale amount, which will be paid in four instalments, includes the replacement of the existing $300,000 environmental bond.
The Moline project sits around 65km east of PNX’s Fountain Head and Hayes Creek projects, which the emerging producer plans to develop as an integrated zinc-gold-silver operation and central processing hub in the Pine Creek region.
The Northern Territory government granted environmental approval for the Fountain Head gold mine in mid-February.
PNX is now working towards final mining approval, which is anticipated to be received by the third quarter of 2023.
The company anticipates mining and processing ore from three wholly owned gold deposits – Fountain Head, Glencoe, and Mt Porter – and two wholly owned zinc-gold-silver deposits – Mt Bonnie and Iron Blow. All five of the deposits are located on granted mining leases.
A prefeasibility study on the Fountain Head gold and Hayes Creek gold-silver-zinc projects completed mid-2021 highlighted a robust, multi-commodity, two-stage mine development that would have an initial mine life of 10 years, a pre-tax net present value (NPV) of $171m and a pre-tax internal rate of return (IRR) of 63%.
That excludes the upgrade to the Glencoe resource and the Mt Porter gold deposit acquired late last year.
“Personnel are on site to recommence regional exploration with a significant program of exploration and development activities on our core projects,” Fox said.
“Drilling is expected to start in May, after the end of the NT wet season and when ground conditions improve.”
This article was developed in collaboration with PNX Metals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
