PNX gets cash top-up for big NT exploration push
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Special Report: PNX Metals (ASX: PNX) has cashed up ahead of the commencement of the 2021 exploration season in the Northern Territory, a period in which it intends to ramp up drilling to grow gold resources on its various projects in the Pine Creek region.
PNX announced on Monday it had received firm commitments for the full placement of the shortfall from a pro rata rights issue launched in November that raised $3.1 million. The shortfall placement, which was managed by 180 Markets, will add another $1.2 million to the company’s coffers.
The funds will be directed towards near-mine and regional exploration on PNX’s 100% owned Fountain Head gold project, the newly acquired Glencoe gold project and the Burnside gold project, which all lie in the Pine Creek Orogen in the NT.
“Such strong support for the shortfall share placement is a testament to the quality of PNX’s NT projects and the company’s development strategy,” managing director James Fox said.
“Government approvals for drilling at Fountain Head have now been received and we look forward to commencing a busy and productive program of work in late February.”
PNX briefly considered bringing in a joint venture partner on the Fountain Head development last year, but rising metal prices ultimately convinced it to retain 100% ownership and focus on opportunities to grow the scale of the project, both through exploration and bolt-on acquisitions of “stranded” assets in the region.
The Glencoe deposit, less than 3km from Fountain Head and on the same structural trend, falls into the stranded category and was the first to be added by PNX through a deal with private group Ausgold Trading announced in early December.
Glencoe has a historic non-JORC compliant resource of 700,000 tonnes at 1.9 g/t Au for 43,000 ounces of gold.
Limited historic drilling down to a maximum depth of just 30m returned high-grade hits including 6m at 3.4g/t gold from 45m, 12m at 1.82g/t from 25m and 2.7m at 28.38g/t from 25.5m.
PNX’s plan is for Fountain Head – which contains a JORC-compliant resource of 2.94 million tonnes at 1.7 g/t Au for 156,000 ounces of gold – to become a regional processing hub for stranded deposits such as Glencoe.
The company anticipates the execution of the formal sale and purchase agreement relating to the Glencoe deposit by the end of the week.
PNX plans to establish a mining operation at Fountain Head before proceeding with the development of the broader Hayes Creek Project, which takes in the Mount Bonnie and Iron Blow zinc-silver-gold VMS deposits.
A feasibility study on the multi-asset development is being fast-tracked, with the company intending to complete it early this year.
This story was developed in collaboration with PNX Metals, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.