Base and precious metals producer, NQ Minerals plc (NQ), has signed a staged acquisition agreement totalling A$2 million to purchase a 100 per cent interest in the historic high-grade Beaconsfield Gold Mine.
Located 200 kilometres from NQ’s current Hellyer base and precious metals operations, Beaconsfield is historically one of the richest gold mines in Tasmania.
Past gold production totalled nearly 2 million ounces from 1887 to 2012 at an average of nearly 15 grams per tonne (g/t).
The assets to be purchased by NQ include a 350,000 tonne per annum (tpa) processing plant, tailings dams, associated infrastructure, property rights, mining leases, and related mining permits.
In commenting on the news of the deal, NQ’s Chairman, David Lenigas, said: “As from today, NQ and its engineering consultant teams commence an extensive due diligence programme on Beaconsfield as part of the acquisition agreement. NQ will be working with its consultants and relevant Government Departments in Tasmania to assess and ascertain what is required to re-open Beaconsfield as soon as possible.”
Mr Lenigas said that acquiring an established gold processing plant for ‘a fraction of the cost’ to build and permit a new one and the typical lead time associated with permitting a new facility in Tasmania are exciting opportunities which should provide shareholders with exposure to the potential near term re-opening of a high-grade gold operation in Tasmania.
“Recent notable successes in re-assessing new potential around historic high-grade gold mining centres has seen significant value add for investors at projects like Fosterville in Victoria and Bellevue in Western Australia. In this regard, we believe that Beaconsfield offers a genuine opportunity for the Company to develop a high-quality gold asset.”
“Furthermore, the opportunity to bring Beaconsfield back into operation reinforces and builds on NQ’s existing activities, commitment to, and strategy in Tasmania. This project will leverage off the skills and experience developed during the successful fast track recommissioning and operation of the Hellyer Gold Mine and complement the development of the Barnes Hill nickel and cobalt mining and processing project. In particular, the close location of the Barnes Hill project to Beaconsfield will enable shared capital and operating costs reducing the implementation timelines and costs for both opportunities,” Mr Lenigas stated.
Gold Resource Potential
Historic gold production at Beaconsfield’s Tasmania Mine occurred in two main phases:
- 1877-1914 – 1.04M tonnes for 855,000 ounces of gold (averaging 25.6 g/t gold)
- 1999-2012 – 2.72M tonnes for 920,000 ounces of gold (averaging 10.5 g/t gold)
As part of the initial programme of works in assessing the potential to re-open Beaconsfield, NQ plans to engage independent consultants to re-assess the existing gold resources available within the mining lease, taking into consideration the 50 per cent increase in A$ gold price since the mine officially ceased underground operations in 2012.
Prior to Beaconsfield’s operator, BCD Resources NL (BCD), closing the underground mine on the 30 June 2012, BCD stated in their June 2011 Annual Report that underground reserves and resources at its Tasmania Mine totalled 336,514 ounces of gold.
NQ detailed that sizeable unmined areas remain within the existing mine envelope and the gold mineralisation is open at depth.
In the full year to 30 June 2012, the Mine’s last year of underground production, output was 246,084 tonnes at 6.5 g/t gold with plant recoveries averaging 86.9 per cent.
This resulted in 44,829 ounces of gold production for the year at an average operating cost of A$1,027 per ounce.
The processing plant ceased treatment of gold ores in 2013 after treating surface stockpiles and has been in care and maintenance since.
Significant drill intersections have been made below 1210m (the lowest mine working level at the time of closure) down to a depth of 1360m, which NQ says illustrates the potential of further ore to depth, these include:
- 0m at 21.7 g/t gold (hole F91 at ~1220m depth)
- 0m at 15.4 g/t gold (hole F88 at ~1235m depth)
- 3m at 8.8 g/t gold (hole J17 at ~1240m depth)
- 6m at 11.3 g/t gold (hole J14 at ~1255m depth)
- 5m at 32.4 g/t gold (hole J10 at ~1355m depth)
(Note: Drill intercepts reported in BCD Resources NL news release to the ASX on 30 November 2011.)
Terms of the Transaction
NQ has, via a wholly-owned subsidiary, entered into a binding sale agreement with the mortgagee in possession, to purchase a 100 per cent interest in the Beaconsfield Gold Mine which includes a number of mining leases, as well as all associated plant and equipment.
Following settlement, NQ will have a 100 per cent interest in the mine and associated assets.
The total consideration for the acquisition is A$2 million, paid as follows:
- on the date of signing, an initial non-refundable payment of A$100,000;
- a refundable deposit of A$100,000 payable on exchange;
- on settlement, a further A$800,000 is payable; and
- the balance of the A$1 million purchase price to be paid by NQ by 31 December 2020 with interest accruing at 10 per cent per annum from 1 July 2020.
The balance of the purchase price which remains payable following settlement will be secured including by way of a charge over the assets which are the subject of the acquisition.
Completion of the transaction is conditional upon normal regulatory approvals being obtained by 30 June 2020, including the consent of the Tasmanian Government to the transfer of the relevant mining leases to NQ.
