THE BOURSE WHISPERER: Tyranna Resources (ASX: TYX) has entered into a binding agreement to acquire the advanced Eureka gold project from Canadian TSX Venture Exchange-listed Central Iron Ore Limited.
Tyranna Resources said the project, which hosts the Eureka open cut gold mine, will provide the company with a potential cash generating asset that can be used to fund its exploration activities at the Jumbuck gold project in the northern Gawler block of South Australia.
Tyranna will be commencing additional drilling in December aimed at upgrading the project’s historical resource estimate to a JORC (2012) compliant estimate.
Samples from this drilling will be used for geotechnical (Optical Televiewer (OTV) to be used for increased structural information collection and interpretation) and metallurgical test work.
Upon receipt of the drill results, Tyranna will commence a mining feasibility study to evaluate the possibility of mining and toll treating to nearby processing mills.
Once the mineral resource has been updated mining studies will commence with the aim of estimating an updated Ore Reserve.
“The Eureka open cut gold mine is currently being developed by a local contractor and it is expected that production will commence in early December 2017,” Tyranna Resources said in its ASX announcement.
“Production is scheduled to extend the depth of the current open pit by approximately 20 metres and will be completed during the March 2018 quarter.
“Once this phase of mining is completed, Tyranna will estimate an updated Ore Reserve with the aim of recommencing mining pending the results of a feasibility study.”
Under the terms of the acquisition, Tyranna will receive a royalty equal to 4 per cent of the net smelter return generated from the sale of gold and or any other minerals.
The company indicated that all royalty receipts will be used to offset the acquisition consideration.
Tyranna will receive $250,000 when production commences as a prepayment of this royalty.