Citigold opens a new route to Charters Towers gold production

NMR takes control of Charters Towers proving-up program

Citigold Corporation Limited (ASX:CTO) has put Native Mineral Resources Holdings Limited (ASX:NMR) in charge of the next serious test of its Charters Towers gold project, signing a binding joint venture over 40 tenements across the Central, Warrior and Stockholm areas in Queensland.

“Location of the Central, Warrior (Imperial) and Stockholm Mining Leases, Charters Towers, Queensland.”

The deal gives NMR exclusive rights to exploration and proving-up drilling, together with sole operational control of that work. If the drilling and assays support development, NMR may elect to mine, haul and process material through its Blackjack plant, which sits within 10 kilometres of the tenements. The arrangement replaces the earlier September Charters Towers joint venture, which covered four mining leases near the project.

Large resource base, but limited geological confidence

The tenements host the majority of Citigold’s reported resources in the Central and Warrior areas. Table 2 in the announcement reports 3.1 million tonnes at 7.6 grams per tonne gold for about 760,000 ounces in the Indicated category, alongside 26 million tonnes at 14 grams per tonne for about 11 million ounces Inferred.

Those figures are not equivalent to a mineable inventory. Approximately 94% of the contained ounces in the table are Inferred, a category the company describes as having low geological confidence. Citigold says there is no certainty that further drilling will convert those ounces to Indicated resources or that they will ultimately be mined. The announcement’s highlights quote slightly different totals of 764,000 Indicated ounces and 11.5 million Inferred ounces, with the table noting that totals may differ because of rounding.

Cash-free entry for NMR, production-linked value for Citigold

No upfront consideration is payable by either party. Instead, NMR can recover eligible costs from gross smelt proceeds, including drilling, development, mining, processing and directly attributable financing costs, with an 8% margin. Queensland royalties and unrecovered costs are deducted before any remaining surplus is divided equally between the two companies.

Citigold retains ownership of the tenements and responsibility for keeping them in good standing, including the applicable environmental authority. It will also receive a one-off A$5 million production payment once 8,000 fine ounces have been produced from ore mined under the joint venture. That payment is additional to Citigold’s share of surplus and is not treated as an NMR cost.

Drilling comes before any mining decision

NMR will now plan the proving-up campaign, including target priorities, drilling sequence, contractors, approvals and operational arrangements across the three project areas. The company can decide not to proceed after receiving and assessing the final drilling and assay results, in which case the agreement terminates under its terms.

That staged structure gives NMR access to a large, nearby resource base without committing to mining at the outset. For Citigold, it offers a potential route to development while leaving it with tenement obligations and exposure to the quality of future drilling, cost recovery and any eventual production decision. Several leases also require a separate or amended environmental authority before mining could occur.