The enigmatic epithermal gold-silver prospect at Puhipuhi in Northland has a new owner.
The prospect, scene of some early gold mining operations, has had several owners in recent years including Newmont Waihi, De Grey Mining, and the latest owner Evolution Mining Ltd (ASX: EVN).
Vancouver explorer Full Metal Minerals Inc (TSX-V: FMM) said it has entered into a share purchase agreement with Evolution to buy the Puhipuhi gold prospect.
Full Metal said high grade gold and silver has been intercepted on zones two kilometres apart and that drill hits had included two metres at 17 grams/tonne gold and 15 g/t silver; 0.6m @ 23.4 g/t Au and 146 g/t Ag and 2 m at 12.4 g/t Au and 85 g/t Ag.
Full Metal said a 28m vein intercept was also detected, but it hasn’t been followed up by subsequent drilling.
The company considers Puhipuhi analogous to OceanaGold’s Waihi mining operation, a low sulphidation epithermal gold-silver deposit that has been in modern production since 1988.
Under terms of the purchase agreement, Full Metal will provide Evolution with an initial cash payment of $C50,000 at closing.
In addition, it has agreed to pay up to $C275,000 upon Evolution NZ entering into a new or amended access agreement with certain surface rights owners; $C250,000 upon exploration expenditures of $C2 million being incurred; $C250,000 upon cumulative exploration expenditures of $C4 M; $C500,000 upon completion of a compliant technical report containing an estimate of mineral resources of at least 500,000 oz gold; $C1.75 M on completion of a feasibility study; and $C2.5 M on a start to commercial production.
Linked to the acquisition, Full Metal was arranging equity financing through up to 15.625 M shares at $C0.08 per share to raise $C1.25 M.
Evolution had undertaken perhaps the most sustained exploration programme on Puhipuhi, including a drilling programme concluded last year that did not produce the results it wanted – at a time it was accelerating exploration on targets in Australia.
When it halted the programme, a Northland anti-mining group crowed that they had driven out the nasty miner that was going to endanger the area by opening up areas where historic mining for mercury had taken place about a century before.
Their noise did not compel Evolution to wind down its work, but a lack of conclusive results did, at a time the focus was growing on targets back in Australia.
The arrival of the Canadian junior will put the anti-miners and their Green Party associates back into overdrive on claims about exploration including drilling and the spurious claim it would create mercury contamination in Northland – one of the regions with relatively high unemployment.
The anti-miners will be buoyed by recent actions and statements by Jacinda Ardern’s Labour Government and coalition partner the Green Party which has seen New Zealand portrayed as not welcoming any new offshore oil permits.
The third party in the Government coalition is New Zealand First and its senior minister Shane Jones is a Northlander and is responsible for regional development issues. He is unlikely to want to pull the “welcome” mat from under Full Metal Minerals.