Gold focused WPG Resources (ASX:WPG) has moved to full 100%...

Gold focused WPG Resources (ASX:WPG) has moved to full 100% ownership of the Tunkillia gold project in South Australia by the acquisition of the remaining 30% interest owned by Helix Resources (ASX:HLX).

WPG agreed to pay $500,000 and allot 10 million shares to Helix on transfer of the tenements, with a similar trailing payment and share issue along with a royalty when Tunkillia is developed.

The increase to 100% is significant as it provides a platform for a new exploration strategy and project development progression.

The Project comprises EL 4812, EL 4495 and MC 4347..

WPG acquired 70% of the Project at the end of May this year with its transition into a gold explorer and developer through the acquisition of the Tunkillia and Tarcoola projects in the Gawler Craton from Mungana Goldmines Limited (ASX:MUX).

Under the Sale and Purchase Agreement (SPA) reached with HLX and announced today, WPG will own 100% of the Tenements previously held by HLX on behalf of the Tunkillia JV.

As a result of the transaction, the Mining Lease Proposal (MLP) which was submitted to the Department of State Development (DSD) in April this year will be withdrawn.

This will enable WPG to re-apply for a Mineral Claim and re-submit the MLP in its own name.

Mineralisation at Tunkillia was first discovered by Helix in late 1996, during a drilling program to test an extensive surface geochemical anomaly defined from calcrete sampling.

Subsequent to the initial discovery, progressive evaluation of the project has been undertaken through joint venture arrangements.

Longer term, the 100% ownership of Tunkilla will enable WPG to capture full project cashflows and revenues, increasing returns to WPG shareholders.

 

Chairman Bob Duffin key comments at AGM

"We have put the Tarcoola project on fast track to development targeting construction by the end of calendar 2015 and are still on track for this.

Intensive review and verification of data has confirmed Tarcoola could be successfully developed into a conventional open pit mining operation with associated heap leach processing, producing approximately 20,000oz of gold per year with initial mine life expected to be up to five years.

"Tunkillia is a much larger deposit than Tarcoola. Thus we see the Tunkillia project as the “blue sky” value add for our shareholders.

"Our initial efforts at Tunkillia are now being directed towards defining higher grade pockets within the known deposit that may provide an opportunity to generate a cashflow prior to the development of the larger deposit itself. We will also ramp up the exploration program and test anomalies away from the known deposit.

"Including our 100% owned EL 4696, WPG now controls more than 1,600 square kilometres over the highly prospective Yarlbrinda shear zone which hosts the existing gold deposit, and has excellent potential for extensions and further discoveries.

"This shear zone has many of the same characteristics as several of the shear zones near Kalgoorlie and if this area was in Western Australia it would have been extensively explored by now.

"We are confident that we have the financial resources to bring Tarcoola to decision to mine stage on our own.

"In order to raise additional funds, we are in the process of selling our land at Port Pirie. There is currently a $500 million upgrade program underway at the Port Pirie smelter and we are hopeful the land can be sold early in the New Year.

"Proceeds of the sale, if it proceeds as expected, should be sufficient to cover the acquisition cost of the deal announced with Helix today and also provide working capital for fast tracking the exploration program at Tunkillia, and the work we are doing at Tarcoola.

"Despite all our busy activity on our gold projects and this land sale we have not shut up shop on pursuing further opportunities. We still continue a comprehensive regime of review of mining investment opportunities, covering a wide range of commodities and mining sectors both in Australia and overseas.