NMR Secures Exclusive Exploration Rights Over Four Charters Towers Tenements
Native Mineral Resources (ASX:NMR) has secured exclusive rights to explore and potentially mine four tenements near its Blackjack operation through a joint venture with Citigold (ASX:CTO). The staged agreement allows NMR to assess mineralisation before deciding on mining, with cost recovery and profit sharing structured to align both parties.
- Joint venture covers four mining leases near Blackjack operations
- NMR has exclusive exploration and operational control
- Mining and processing contingent on proving-up drilling results
- Costs recovered from smelt proceeds with 50:50 surplus split
- Citigold retains tenement ownership and environmental responsibilities
Joint Venture Targets Expansion Near Blackjack
Native Mineral Resources (ASX:NMR) has entered a binding joint venture with Citigold Corporation (ASX:CTO) to explore and potentially mine four tenements collectively known as the Stockholm Tenements, located about 2 kilometres north of NMR’s existing Blackjack operations in Charters Towers, Queensland. This proximity offers a practical opportunity for NMR to haul and process any mined material through its established Blackjack processing plant, streamlining operational logistics.
The tenements cover approximately 128 hectares and include the historic Stockholm open pit, complete with existing mining infrastructure such as stockpiles and access roads. Citigold remains the registered holder of the tenements and is responsible for maintaining statutory and environmental compliance, while NMR gains exclusive rights to undertake exploration and proving-up drilling.
Staged Exploration and Operational Control
NMR will lead a proving-up drilling program to assess the economic viability of mining the Stockholm Tenements. The agreement grants NMR sole operational control over drilling and any subsequent mining activities, including mine planning, contractor management, processing, and sale of product, subject to regulatory approvals.
Following the completion of drilling and receipt of assay results, NMR may elect whether to proceed with mining operations. If the results do not support development, the joint venture arrangement will terminate. This staged approach provides NMR with a disciplined pathway to expand its resource base without the upfront acquisition costs of the tenements.
Commercial Terms Align Interests
Financially, NMR can recover costs incurred during proving-up drilling and mining operations, including an 8% margin on specified cost categories. Costs are recouped from gross smelt proceeds before any surplus is shared equally between NMR and Citigold. Unrecovered costs carry forward to future smelt events, ensuring both parties’ investments are protected.
Citigold retains ownership of the tenements throughout, maintaining environmental authorities and statutory obligations. The agreement remains in place until the economically mineable ore is exhausted, the tenements expire, or either party terminates under agreed conditions.
Next Steps and Uncertainties
NMR is now advancing detailed planning for the proving-up drilling program, including contractor engagement and regulatory approvals. While the joint venture opens a promising avenue to supplement feedstock for the Blackjack operation, there is no guarantee that drilling will confirm economically viable mineralisation or that mining will proceed.
This development arrives as NMR recently achieved record gold production at Blackjack, demonstrating operational momentum that could be bolstered by new feed sources if the Stockholm tenements prove productive.
Bottom Line?
The joint venture offers NMR a low-risk, staged opportunity to expand its resource base near Blackjack, but mining depends on proving-up drilling results and regulatory approvals.
Questions in the middle?
- Will proving-up drilling confirm economically viable mineralisation at Stockholm?
- How might additional feed from Stockholm tenements impact Blackjack’s production profile?
- What regulatory or environmental challenges could affect the joint venture’s timeline?
