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PNX launches $4.4m rights issue to advance integrated NT zinc-gold-silver development
Mining
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PNX Metals is undertaking a $4.4m rights issue and has already secured nearly half via firm commitments, including from major German shareholder DELPHI, to continue towards its goal of building an integrated zinc-gold-silver operation in the Northern Territory.
PNX Metals (ASX:PNX) has received firm commitments for $2.1m of the larger $4.4m rights issue, which is a sign of the strong support from existing shareholders for the company’s plan to build an integrated zinc-gold-silver project in the Northern Territory.
Shareholders are being offered one new share for every three existing shares at 0.3c each under the non-renounceable pro-rata rights issue.
Substantial shareholder and cornerstone investor DELPHI Unternehmensberatung Aktiengesellschaft has already pledged its commitment to the raising.
The cash will be used to support the ongoing development of the 100% owned Fountain Head and Hayes Creek integrated zinc-gold-silver projects, as well as continue near mine and regional gold and base metals exploration.
“We look forward to continuing to increase the resource base through near-mine and regional exploration and updating development studies with the results of integrated project synergies, test-work and flowsheet optimisation,” managing director James Fox said.
“The pending approval of the Fountain head EIS will be a significant milestone and clears the way forward to submit operational mine management plans and commence early site activities.”
PNX has been working hard to lay the foundation for further resource growth this year, with drilling late last year successfully confirming extensions to defined mineral lodes at the Glencoe gold deposit. Several drill holes intersected gold outside of the existing resource.
PNX also recently identified strong prospective gold targets between the Glencoe and Fountain Head deposits in a drone mag survey.
These could potentially be the same prospective rocks that host the nearby +1.2Moz Cosmo gold mine, demonstrating the significant untested gold and base metals potential of PNX’s 1,500sq.km exploration tenure in the Pine Creek region of the Northern Territory.
Glencoe currently has a defined resource of 2.1 million tonnes at 1.2g/t for 79,000oz of contained gold, with 77.4% of the total in the higher confidence measured and indicated categories.
This forms part of a substantial war chest that includes 521koz gold, 16.2Moz of silver, 177,000 tonnes of zinc, 37,000 tonnes of lead and 10,000 tonnes of copper.
PNX plans to undertake further drilling to test the gold targets between Glencoe and Fountain Head when it can access the ground after the NT wet season, from April.
Building scale
PNX continues to build scale and position Fountain Head as a regional zinc-gold-silver processing hub, having previously acquired Glencoe and more recently the Mt Porter deposit along with significantly growing the resource.
“Assessment of potential consolidation opportunities will continue where there is strong support for project financing, improved margins and scale potential,” Fox said.
A preliminary feasibility study completed mid-last year on the Fountain Head and Hayes Creek projects showed it would be a profitable long-life operation.
PNX’s larger plan is to mine and process 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%. This was excluding the upgrade to Glencoe, and excludes Mt Porter.
“We look forward to continuing to de-risk the projects and delivering on the potential for the Fountain Head and Hayes Creek to create significant value for the company’s shareholders,” Fox said.
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.
