Adelong Gold and Great Divide Mining Form Strategic Partnership for Gold Production
ADG (ADG) Share Update October 2024 Wednesday 23rd
Adelong Gold Partners with Great Divide Mining for Gold Production
Adelong Gold Limited (ASX: ADG) has announced a strategic partnership with Great Divide Mining Limited (ASX: GDM) to restart gold production at the Adelong Gold Project in New South Wales within 12 months.
Instant Summary:
- Adelong Gold partners with Great Divide Mining for a 51% stake in the Adelong Gold Project.
- GDM to invest $300,000 for an initial 15% stake in Challenger Gold Mines.
- GDM to gain an additional 36% upon achieving first gold production within 12 months.
- Adelong retains a 49% interest and no cash contributions are required until production.
- The Ryan Family to provide critical mining equipment and expertise.
Partnership Overview
Adelong Gold Limited and Great Divide Mining Limited have entered into a binding farm-in agreement, which allows GDM to acquire up to a 51% interest in the Adelong Gold Project. This project, located in the southern highlands of New South Wales, has a rich history of gold production, with over 800,000 ounces extracted to date.
The agreement is structured in stages, with GDM initially investing $300,000 for a 15% stake in Challenger Gold Mines, the entity holding the Adelong Gold Project. Upon achieving first gold production within 12 months, GDM will earn an additional 36% interest, bringing their total to 51%.
Operational Strategy
The partnership aims to leverage GDM’s operational expertise and infrastructure to resume gold production. The Ryan Family, founders of GDM, will play a crucial role by providing mining and earthmoving equipment, supported by their decades of experience in mine management.
Adelong Gold’s Managing Director, Ian Holland, expressed confidence in the partnership, highlighting the potential to turn the Adelong Gold Project into a significant regional base for gold production. The project includes a modern processing plant built in 2016/17, which GDM will refurbish to meet the ambitious production targets.
Project Details and Timeline
The project covers approximately 70 square kilometers of tenements and holds a JORC 2012 Resource of 188,000 ounces, with potential for further expansion. The initial works program will commence shortly after the due diligence period, focusing on refurbishing the Adelong Gold Plant and conducting necessary exploration and feasibility studies.
GDM will manage the day-to-day operations and project development as the Adelong Venture Manager. If GDM fails to achieve first gold production within the stipulated 12-month period, Adelong Gold has the right to reclaim 100% ownership of the project.
This partnership is expected to have a positive impact on Adelong Gold's stock, as it positions the company to resume gold production and potentially increase its resource base. The involvement of the Ryan Family and their equipment is a significant advantage, reducing operational risks and ensuring timely project execution.
Investor Reaction:
Analysts are likely to view this partnership favorably, given the strategic alignment and operational expertise that GDM brings to the table. The clear timeline and milestones provide transparency and could boost investor confidence in Adelong Gold's growth prospects.
Conclusion:
Investors should keep an eye on the progress of the Adelong Gold Project, as successful execution could lead to significant value creation. The partnership with GDM marks a pivotal step in Adelong Gold's strategy to become a leading regional gold producer.