Gilbert + Tobin and Azure Capital are advising Mount Gibson Iron (ASX:MGX) on its acquisition of a 50% interest in the Central Tanami Project Joint Venture (CTPJV) in the Northern Territory.
Mount Gibson will pay $50 million cash to Northern Star Resources (ASX:NST) on completion, along with typical adjustments, and will fund the purchase from internal cash reserves.
The suitor will also be required to replace existing bank guarantees totalling some $5.8 million, which it will do from its existing performance bonding facility.
Mount Gibson says the acquisition marks a significant milestone in its expansion into the gold sector and strengthens its presence in Australia’s resource-rich north.
On completion of the transaction, Mount Gibson intends to work actively with Tanami Gold to bring the CTPJV to a development decision in the shortest possible timeframe.
The company’s intention will be to progress technical update studies for the Groundrush, Ripcord, and Jims deposits to feasibility level, incorporating additional drilling and other data generated by the JV partners in recent periods.
In addition, an engineering review will be required to define the optimum processing and infrastructure options for re-establishing production. This includes assessment of both new build and full or partial refurbishment of the existing processing plant which has been idle since 2005.
This purchase from Northern Star consolidates Mount Gibson’s position and enables future development opportunities across a highly prospective gold tenement package.
As legal advisor, Gilbert + Tobin is working closely with Mount Gibson throughout the deal process, providing strategic, regulatory and transactional support.
Gilbert + Tobin partners Claire Boyd and Justin Mannolini led the deal, and are supported by Lawyer Lucy Burns and Special Counsel Fiona Meaton.
The Central Tanami Gold Project comprises significant gold resources and infrastructure, positioning Mount Gibson to pursue development in one of Australia’s most active exploration regions.
CTPJV is an unincorporated 50:50 joint venture between Northern Star and gold explorer Tanami Gold (ASX:LTAM) located 650km northwest of Alice Springs. The JV was initially established in 2015 as a farm-in arrangement and subsequently restructured in 2021 into the current arrangement.
The objective of the CTPJV is to advance the Central Tanami Gold Project, where in excess of 2 million ounces of gold have previously been extracted from the tenements.
It includes a non-operating 1.2Mtpa carbon-in-leach (CIL) processing plant which has been idle since 2005, and the Groundrush gold deposit which yielded production of more than 600,000 ounces from a single open pit for Newmont Mining (NYSE:NEM) between 2001 and 2005.
In addition, the infrastructure assets include existing mine haul roads, an accommodation camp, a water bore field and a 1.4km gravel airstrip.
Write to Adam Orlando at Mining.com.au
Images: Mount Gibson
