Coyote and the Tanami

I noticed in the Noosa presentation that Black Cat has the Coyote project listed for future development but with no indicative timeframe given. They did say that they intend to run a feasibility study on the project, including an expansion of the 300ktpa mill already onsite, and also that they intend to do some discovery drilling at some future point. Seeing I know zilch about Coyote and the region it is in - the Tanami desert - I thought I'd check things out (the old fashioned way).

Here's some of the stuff I found (and spoiler alert, I reckon I've sleuthed out a twist to the story - [insert some dramatic music]).

The desert

The Tanami desert is located in the mid west of the Northern Territory and across into Western Australia towards the eastern Kimberley region. It's mostly flat though there is some hilly country. Importantly, from our perspective, something like 95% of it has a shallow to medium cover of sand. The region is serviced by a single road, the Tanami Road / Track which starts off just outside Alice Springs, heads north west and then as it nears the WA border goes pretty much due west, ending up near Halls Creek in WA. Just before it starts to head due west another road branches off, Lajamanu Road, which runs north to an indigenous community. Worth noting that the region is affected by the wet season so exploration activity dies down between around November to April.

The mining region

This bit I might have wrong but my understanding is that the geology of interest in the Tanami desert is called the Granites-Tanami Orogen, with the main fault-line starting off while the Tanami Road is still going north west and then continues west across into WA. Spinning off from that main fault-line are a number of north-south cross faults or "splays". The region of interest to the miners seems to be more or less broken into four sub-regions: East, Central, North and West. Tanami West totally is in WA, and Tanami North sort of sits on top of Central Tanami and Tanami West. Lajamanu Road runs north along the eastern edge of the Tanami North sub-region.

The mining tenements

One of the resident tiddlers, PVW Resources, has put together a ripper map clearly showing all the areas held by the numerous players (more about PVW later). It's probably out of date but it is by far the best map of the Tanami tenements I've come across.


Black Cat currently has three island tenements just on the WA side of the border, all in Tanami West. The Coyote mill is on the middle tenement, it has been in care and maintenance since 2013 (but hey it's in a desert) and was set up to process 300ktpa. But nothing else within cooee. The blocks' MRE is 645koz at 5.5g/t.

There is also a mill in Central Tamami linked to Tamani Gold but it has been in c&m since 2005. Recent corporate action suggests that this mill will be rejuvenated sooner rather than later.

... and in the far east there is the Tanami behemoth, Newmont's Tanami operation: Australia's deepest mine, Newmont's best mine by margin per ounce, has been operating since 1983 and still got decades to go, being ramped up to 600kozpa. Until recently I'd not heard of it, also called Callie or the Dead Bullock Soak, but here's some more info about it, - click here and here. Pretty fn stunning if you ask me. Also worth noting is neither Callie or Coyote are located on the main fault-line but rather are on splays.

So, other than Newmont absolutely crushing it in the east the Tanami minerals region is more exploration than production, more hope than substance, at this point in time, but ... (and this next bit has got the twist)

The beachmasters

Of course, in Tanami East Newmont is the established beachmaster, in total control of their territory. Not only do they have the 14moz at Callie but in relatively recent times they have also proved up 2.7moz at Oberon - click here for a detailed description. They have also taken up joint ventures over extensive tenements in the east owned by Prodigy Gold (if they want they can get to 70% of Tobruk which is just shy of 3,000sqkm and to 80% of Monza which covers around 3,600sqkm).

And it would seem that another major gold company is looking to become a beachmaster over part of the Tanami region, this time on the western side of the belt. Early last year the South African major, Goldfields, which already has Agnew, Granny Smith, Gruyere and St Ives in WA, signed up with the tiddler Killi Resources to earn-in up to 85% of Killi's Tanami West project of 1,600 sqkm. Goldfields will do all the work and Killi has effectively moved on. Also just last month Goldfields increased its equity stake to 18% in another minnow, Hamelin Gold, which has tenements in west Tanami of about 2,300sqkm (Vault also holds 12% of Hamelin but that is a legacy holding with Vault not participating in that recent cap raise by Hamelin). The land held by Killi and Hamelin are in the general vicinity of Coyote and my guess is that Goldfields will only be interested in those land holdings if they deliver multi million ounce discoveries.

A third Tanami beachmaster outed itself last month when the cashed up Mt Gibson Iron acquired Northern Star's assets in central and north Tanami for $50m cash and sundries. MGX picked up tenements 100% owned by NST and also NST's 50% interest in a joint venture with Tanami Gold. The common thread here is the Hong Kong domiciled APAC Resources - click here - and its local pointman, Brett Smith. APAC holds about 38% of MGX's share registry, about 46% of Tanami Gold and 44% of Prodigy, and Brett Smith is on the board of all three companies. MGX is cashed up and has openly stated that it wants to move away from iron ore and into commodities like gold and copper. By Mt Gibson buying Northern Star out of the Tanami thereby co-locating with Tanami Gold and Prodigy I reckon APAC has shown its hand about developing a base in the Tanami.

Finally, Black Cat and Coyote

Even though Black Cat has had Coyote on the back-burner I assume the team is still intent on getting the project back operating within a reasonable timeframe. (A counter view is that Coyote being the only permitted mill site in the Tanami West makes it attractive to Goldfields, and Black Cat is pragmatic enough to take the money and walk away). Coyote is a smallish but high grade project, with a 300ktpa mill that has been in care & maintenance since 2013, and a resource of 645koz at 5.5 g/t. Being so remote though it could do with getting bigger and having a longer life of mine.

In that light, here are some possible opportunities for Black Cat regarding Coyote:

• the obvious one is to get an expanded Coyote mill back operating to take advantage of record gold prices, and to go increase the resources on its existing tenements (as per the Noosa presentation).

• do a deal with its immediate neighbour, PVW Resources, for PVW's gold rights. PVW is straight out saying that it is no longer interested in gold but is now focused on rare earths, more specifically REE in Brazil. I'd rather see Black Cat "landbank" those rights now than let another mining company pick it up.

• talk to Hamelin / Killi / Goldfields about toll treating / divvying up any future easily monitised discoveries in their tenements. At this stage Hamelin and Killi are too small to build their own mills and Goldfields are surely only interested in elephants.

• talk to the APAC grouping about toll treating / divvying up the small already identified deposits that Prodigy has on the NT side of the border (Buccaneer is 359koz at 1.2 g/t and Old Pirate is 115koz at 4.7 g/t).

Anyway, that's as far as I got. No doubt a bot could do a better job in a fraction of time but I've enjoyed the journey and learnt heaps. Happy for people to tell me what I got wrong.

Disclosure: Besides following Black Cat I also follow Hamelin Gold as I like how that team is going about their work.