Tectonic Gold Plc Acquisition of VAST JV

 
TIDMTTAU 
 
13 May 2019 
 
                               TECTONIC GOLD PLC 
 
                      ("Tectonic Gold" or the "Company") 
 
                    Acquisition of Diamond mining contract 
 
Tectonic Gold plc (TDIM: TTAU) is pleased to announce that it has restructured 
the diamond mining joint venture previously announced and that the Company's 
100% owned subsidiary, Tectonic South Africa Pty Ltd ("Tectonic SA"), is taking 
full operating control and a 100% economic interest in the VAST Mineral Sands 
Pty Ltd ("VAST") diamond mining contract. VAST remains a partner via the equity 
consideration in Tectonic Gold previously agreed and a production royalty on 
the contract. 
 
Highlights: 
 
  * Tectonic Gold has, as of 1 May 2019, taken operational control of the VAST 
    land mining contract 
 
  * Intention to self-fund all future gold exploration activities from project 
    cash flows 
 
  * New subsidiary, Tectonic SA, established 
 
  * VAST diamond mining team transferred to Tectonic SA 
 
  * Equipment leases transferred to Tectonic SA 
 
  * Consideration includes the original JV consideration announced 18 January 
    2019 and a 3% royalty on gross diamond sales 
 
  * Tectonic SA to 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. 
 
About Tectonic Gold: 
 
Tectonic Gold is a specialist gold exploration company, focused on the 
identification and delineation of large-scale, multimillion-ounce Intrusion 
Related Gold System ("IRGS") assets. Tectonic Gold holds a number of gold 
discoveries in the New England Orogen in Eastern Australia, a prolific gold 
region that is home to Australia's two largest gold production companies, 
Newcrest Mining and Evolution Mining. 
 
A successful diamond drilling campaign in 2018 on the Company's flagship 
"Specimen Hill" project has confirmed a large diatreme IRGS system similar to 
regional multi-million ounce deposits such as Kidston and Mt Rawdon. Tectonic 
Gold intends to apply the cash flows from the diamond mining operations to 
further drilling at Specimen Hill under an existing drill for equity deal with 
Titeline Drilling. 7,500m of diamond drilling remains available on a 50% cash 
payment basis under this agreement. 
 
Funds will also be allocated to progressing the Company's Mt Cassidy prospect 
during the 2019 calendar year. 
 
Mr. 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. 
 
Qualified Person: 
 
Mr Jonathan Robbeson - BSc (Hons1), MEconGeol, MMinEng, (CP Geo) is a full-time 
employee of Signature Gold Limited and is a registered Chartered Professional 
(Geology) with the Australian Institute of Mining and Metallurgy (AusIMM - 
304542). Mr Robbeson has sufficient experience that is relevant to the style of 
mineralisation and type of deposit under consideration and the activity being 
undertaken to qualify as a Competent Person as defined in the Note for Mining 
Oil & Gas Companies, June 2009, of the London Stock Exchange and the 2012 
Edition of the 'Australian Code for Reporting of Exploration Results, Mineral 
Resources and Ore Reserves' (JORC Code). Mr Robbeson consents to the inclusion 
in the release of the matters based on his information in the form and context 
in which it appears. 
 
The Directors of the Company accept responsibility for the contents of this 
announcement. 
 
For further information, please contact: 
 
Tectonic Gold plc                                             [phone] 
Brett Boynton 
Sam Quinn 
www.tectonicgold.com 
@tectonic_gold 
 
NEX Exchange Corporate Adviser and 
Broker                                                       [phone] 
Peterhouse Capital Limited 
Mark Anwyl 
 
Financial Adviser and Broker 
VSA Capital Limited                                          [phone] 
Andrew Raca - Corporate Finance 
Andrew Monk - Corporate Broking 
 
 
                                     Ends 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulations 
(EU) No. 596/2014. Upon the publication of this announcement via a Regulatory 
Information Service, this inside information is now considered to be in the 
public domain. 
 
 
 
END 
 

(END) Dow Jones Newswires

May 13, 2019 02:01 ET (06:01 GMT)