The company will fund the acquisition from existing cash reserves. Pic: Getty Images
TG Metals picks up advanced WA gold asset
Mining
share
- TG6 acquires historic Van Uden gold project which hosts existing stockpiles
- Those stockpiles could be toll treated, representing a near-term cash flow opportunity
- The company also plans to update the resource estimate from 2013
Special Report: TG Metals has acquired 80% of the Van Uden gold project in WA, which consists of four granted mining leases with historical production from two open pits.
Past exploration drilling by Convergent Minerals and Kidman Resources defined extensive mineralisation at Van Uden and shallow mineralisation at Gold City, and Convergent actually published a resource estimate (and even conducted preliminary mining studies) in 2013 of 5.378Mt at 1.38g/t for 238,000oz gold.
This historical resource will form the basis for further confirmatory drilling, extensional drilling and bulk density analysis to enable a JORC 2012 compliant resource estimate to be calculated.
Not to mention, the project is close to the producing Marvel Loch and mothballed Edna May gold processing plants and is 130km from TG Metals’ (ASX:TG6) established Burmeister lithium deposit at the Lake Johnston project.
This opens up the opportunity for near term cash flow for the company from existing stockpiles if it can access those nearby toll treatment facilities.
That’s not a bad move when the gold price is inching towards a record US$3000/oz (+$4600/oz).
The company also notes there’s significant upside with the shallow mineralisation open down dip.
Barto Gold retains 20% equity interest in the project.
Near term cash flow draw card
Past production from two open pits, Tasman and Diemens, as well as surface gold bearing laterite, is recorded as 136,023 tonnes at 2.54g/t for 11,142oz gold, which gives TG6 some solid near-term cash flow potential from toll treating stockpiles.
That mining was also shallow (<40m) meaning there’s potential for a more extensive mining operation – especially at the current record gold metal prices.
“This strategic acquisition provides TG Metals with an advanced gold project with opportunities for near term cash flow, at a time of record prices for gold,” TG6 CEO David Selfe said.
“It is located very near to our existing Lake Johnston lithium deposits, which allows opportunities for operational synergies for both of TG’s projects.
“The Van Uden gold project has historically only been subject to shallow drilling, providing enormous exploration upside through testing the known mineralisation down dip along its entire plus 2000m strike length.
“There are several near-term high priority opportunities, including defining a JORC 2012 mineral resource estimate from the extensive historical database, and assessing the viability of existing ore stockpiles for toll treatment.”
Drill planning has also commenced for the first drilling to be conducted by TG6.
In the meantime, the Lake Johnston project will be advanced in readiness for lithium market improvement.
Acquisition terms
The transaction will be satisfied by an upfront cash payment of $2.5 million and the issue of 5,714,285 fully paid ordinary shares in TG Metals (to the value of $1 million) at a deemed issue price of $0.175 per share. That’s a 67% premium to the closing price on 28 February 2025.
Plus, a $500,000 deferred payment is payable to the vendor on the earlier of 12 months from the date of completion or on the company completing an equity raising of at least $1 million.
No shareholder approval is required for the transaction, and the cash consideration for the acquisition will be funded from existing cash reserves.
This article was developed in collaboration with TG 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.
