Terramin Australia is buying an ancient, 173-year-old underground high grade gold operation in South Australia which somehow still has a mining permit thanks to a historic legal loophole.

Terramin Australia (ASX:TZN) will acquire “Private Mine No 53”, a historic copper gold mine that was mined on-and-off between 1846 and 1971.

These private mines are an artefact of South Australia’s changing mining laws.

At certain times in the state’s history the rights to minerals were given to property owners — which was stopped by the Mining Act in 1971.

However, those landowners who already had an existing mine were granted a perpetual statutory right in the form of a private mine.

The acquisition is all part of Terramin’s strategy to reach the magical 1-million-ounce resource mark by building on its nearby high grade, 265,000 ounce Bird-In-Hand gold project.

The company said regional exploration would focus on similar high-grade opportunities identified from historical 19th century workings – like Private Mine No 53.

Following approvals from the Department for Energy and Mining, Terramin will drill the ‘Mastermann’ Lode at PM53 to determine if the mine has more treasure buried somewhere.

“Terramin is excited about the opportunity of adding potential production from [PM53] to its Bird-in-Hand project in the Adelaide Hills,” Terramin chief executive Richard Taylor said.

“PM53 is fairly unique in that it remains an approved mine (subject to the grant of updated environment approvals) that has not operated since 1971.

“If successful, exploration would provide additional feed to processing planned for the Angas facility at Strathalbyn.”