Tempest Minerals (ASX:TEM) has entered into a conditional agreement with Lole Mining to acquire the ‘world-class’ portfolio of assets including the ‘high-grade’ Tolukuma Mine and Mt Penck Project in Papua New Guinea.
The company reports the transformative deal gives Tempest Minerals a near-term production asset within a more than 2,000km-square exploration portfolio along strike from some of the biggest gold and copper mines in the world.
The deal comprises a conditional multi-stage transaction where Lole will amalgamate with Tempest Minerals under its ownership in Papua New Guinea on an equity-based acquisition value of about $25.69 million.
The acquisition of the Lole assets is in addition to and complements the current exploration activities and potential developments at Tempest Minerals’ Western Australian portfolio.
An aggressive exploration strategy is in place which is designed to further advance the recent discovery of mineralisation in the newly defined mineral province at the Meleya Project.
The company identified the Lole opportunity as fitting the company’s profile for desired project criteria and includes a compelling commercial case for short-term production potential and exploration success.
Tempest Minerals reports the completion of the acquisition is subject to a number of conditions including successful due diligence, shareholder approval, and capital raising to support the transaction.
“This is a major milestone development for Tempest and our shareholders”
Commenting on the acquisition, Managing Director Don Smith said: “This is a major milestone development for Tempest and our shareholders. In line with the company strategy of sustainable discovery and development, we are pushing full steam ahead with our exploration fronts at the Meleya and other Yalgoo regional projects in Western Australia.
At the same time, we have identified this fantastic opportunity to drive growth by positioning ourselves as a near term gold producer with associated revenue stream and by adding high potential exploration ground to the portfolio.
Many of the current TEM team have previously been mine developers and we are really excited to work with the great team at Lole and look forward to generating value through this transformative deal.”
Tolukuma is located some 100km North of Port Moresby in the Central Province of PNG. The mine produced ‘high-grade’ gold and silver intermittently since commencement in 1995. To date, the mine has produced about 1Moz Au and 2.4Moz Ag from small open pit and underground operations.
Tolukuma has significant established infrastructure including a fully established power system – both hydropower and diesel, mine camp and helipad facility which requires some refurbishment but comes at a replacement value of about $200 million.
The Mt. Penck project is located in the West New Britain Province of PNG with vehicle access possible by car through existing agricultural infrastructure roads from the nearby town of Kimbe.
The project has a history of successful exploration dating back to at least the 1960’s however no exploration has been completed since 2011.