CAPE TOWN: Tectonic Gold plc has announced that it has restructured the diamond mining joint venture previously announced and that the Company’s 100% owned subsidiary, Tectonic South Africa Pty Ltd is taking full operating control and a 100% economic interest in the VAST Mineral Sands Pty Ltd diamond mining contract.[the_ad id=”31605″]VAST remains a partner via the equity consideration in Tectonic Gold previously agreed and a production royalty on the contract. Consideration includes the original JV consideration announced 18 January 2019 and a 3% royalty on gross diamond sales. Tectonic SA will reimburse VAST for provision of on-going support to meet contract compliance in rehabilitation, health and safety and security.
Following the initiation of mining under the joint venture agreement with VAST, the mining team completed bulk sampling in a number of areas with recoveries from all samples showing grade and average stone size above expectations. Tectonic Gold has subsequently reached agreement to take full control of the project as exclusive subcontractor with the VAST diamond mining team moving to Tectonic SA effective immediately.
Restructuring the 19 April 2019 joint venture into a subcontract gives the Company operational autonomy in on-going development, equipment financing and planning the expansion of diamond mining operations.
The existing diamond mining team is being transferred to Tectonic SA together with all the equipment currently leased. This has enabled a transition with no operational interruptions to on-site activities.
VAST remains a major on-site presence with their other interests and will continue to support Tectonic Gold as a significant shareholder and Tectonic SA as their exclusive subcontractor.
The Company has identified plant and equipment required for expansion of our mining operations. This is currently planned to occur in two stages with the first stage targeting 950 carats per month production and the second increasing production to a minimum of 1,500 carats per month. The Company is in advanced discussions with equipment lease finance providers to acquire the required plant and equipment.
Brett Boynton, Managing Director Tectonic Gold Plc: “This transaction gives us full control over a considerable and readily accessible diamond resource. We have been very encouraged by the grade and stone size coming from our initial bulk testing. In order to maximise the opportunity, we have worked with VAST to restructure our original deal and take full control over the operations. This has enabled us to advance equipment-financing discussions and more confidently plan the mine development, leading to increased production and revenues.
“The strategy remains to fully fund for all of our gold exploration programs from internal production and this transaction gives the Company a strong platform to achieve that. It also puts us on a firmer footing to create liquidity in our share register and encourage interest from new investors”.