Australian explorer Tempest Minerals (ASX:TEM) is looking to acquire the ‘compelling’ and ‘exciting’ Elephant Project on the periphery of the Albany Fraser Belt in Western Australia.
The company, which has a $7.09 million market capitalisation, says the gold project is host to ‘exciting’ coincident geochemical and geophysical targets and has a footprint comparable to other ‘world-class’ gold deposits in the region.
Tempest reports that under a non-binding term sheet signed with sole project owner Lusture, which is wholly owned by MAC3, it will now undertake legal, financial, and technical due diligence on the project.
Once completed, Tempest will pay $31,000 in cash and issue to MAC3 $69,000 in fully paid ordinary shares at its 30-day volume-weighted average price (VWAP) prior to the completion of the deal. This will give Tempest an 80% interest in Lusture.
As part of the agreement, Tempest has agreed to incur $500,000 in exploration expenditure over a period of 3-years to maintain its 80% interest in Lusture. MAC3 will retain the remaining 20% interest.
Further, Tempest will issue 30 million fully paid ordinary shares as further consideration upon the identification of an aggregate minimum of 250,000 ounces of gold equivalent of not less than JORC indicated category on the project within 5 years.
With both parties agreeing to the non-binding term sheet, Tempest announces it will move forward with the completion of conditions precedent, as well as the completion of a share purchase agreement scheduled for late Q3 2023.
Exploration is also expected to begin as part of these future plans.
The Elephant project is located on the edge of a geological block considered ‘favourable’ for ‘major’ discoveries. The project covers a total area of 194km-square, with 135km-square granted and the remaining 59km-square currently under application.
Tempest is an ASX-listed mineral explorer with a portfolio of projects in Western Australia considered ‘highly prospective’ for precious, base, and energy metals.
Tempest had $2.644 million cash and cash equivalents at hand as of 30 June 2023, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Tempest Minerals Ltd