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- Elmore (ELE) finalises an agreement to buy the Peko project, along with all related project companies, in the Northern Territory for $30 million
- The purchase allows Elmore to widen its focus from minerals processing to open pit and underground mineralisation, and the significant exploration potential of the tenements
- As part of the contract, ELE will guarantee the performance a pre-existing royalty agreement between the ICA group and its retiring shareholders to receive 20,000 ounces of gold
- The company will undertake remodelling and surveying to convert the resources at the project into a JORC 2012 classification
- Shares in Elmore are up 2.94 per cent, trading at 3.5 cents as of 2:19 pm AEST
Elmore (ELE) has finalised a binding purchase agreement to buy the Peko project plus all of the companies related to the project held by the existing owners.
The purchase has been funded through a vendor finance agreement and allows Elmore to widen its focus from minerals processing to known and potential open pit and underground mineralisation, and the significant exploration potential of the tenements.
As part of the contract, Elmore will pay $30 million to buy the NT-based project and will also guarantee the performance a pre-existing royalty agreement between the ICA group and its retiring shareholders, Peko Gold Lending, to receive a total of 20,000 ounces of gold.
The company will give the agreed gold at the higher of 900 ounces per quarter or 25 per cent of production from commencement of production which must occur within three years.
Peko Gold Lending’s David McIntosh said the combined knowledge and skills of the Elmore Board are “much better positioned” to gain the most benefit from the mine, to make it work commercially and to give the best returns for all investors.
Mr McIntosh’s statement was reiterated by Elmore Managing Director David Mendelawitz, who said the project is starting to show potential to be both long-term and lucrative.
“Peko offers a wide range of income streams to act as both additions to revenue and
hedges to each other during market fluctuations.
“Whilst the purchase of the project was not something that we had expected or planned for, after being involved with Peko for the last few years we believed that it was an opportunity that we could not pass up.”
In its plans, Elmore will undertake remodelling and surveying at the project to convert the resources into the JORC 2012 classification.
Further, the company implored its shareholders to use the resource statements it provided as a guide rather than a definitive statement.
In parallel with the Peko iron project, Elmore has plans to expand the operation to include recovery of copper, cobalt and gold.
Additionally, the company has extended its funding facility provided by Avior by another $1.5 million provided in two tranches over a month.
The company is now entitled to all proceeds of product sales, including inventories in Darwin and on site.
Shares in Elmore were up 2.94 per cent, trading at 3.5 cents as of 2:19 pm AEST.
