Tectonic Gold Plc Update on Diamond Mining Project

 
TIDMTTAU 
 
30 September 2019 
 
                               TECTONIC GOLD PLC 
 
                      ("Tectonic Gold" or the "Company") 
 
                       UPDATE ON DIAMOND MINING PROJECT 
 
Tectonic Gold plc (TDIM: TTAU) is pleased to announce that its 100% owned 
subsidiary Tectonic South Africa Pty Ltd ("Tectonic SA") was earlier this month 
invited to tender for a direct land mining contract for mining on its South 
African diamond project. As announced on 13 May 2019, the company was planning 
to operate under a long-term sub-contract with VAST Mineral Sands Pty Ltd 
("VAST") who had previously been granted a land mining contract. Following 
successful trial mining and bulk sampling over the last six months the we are 
pleased to be offered the opportunity to apply for a mining contract in our own 
right on the same terms as the original VAST contract and consequently the 
proposed contract with VAST will not be taken to completion. 
 
Highlights: 
 
  * Tectonic SA has filed an application to become prime diamond mining 
    contractor 
 
  * Sub-contract with VAST will not be taken to completion, no equity issuance 
    for the proposed purchase consideration from VAST 
 
  * Successful trial mining and bulk sampling completed 
 
  * Targeting areas containing in excess of 500,000 carats 
 
  * Management estimates average revenues of approximately US$400 per carat 
 
Tectonic SA has responded to an invitation to submit a tender and today filed 
an application to become a direct land mining contractor on the Alexkor/RMC 
Pooling and Sharing Joint Venture ("PSJV") diamond mine in South Africa. 
 
Tectonic SA has been active on the site over the past six months building a 
local team and conducting trial mining on selected areas to provide ores for 
bulk sampling. This has enabled the operations team to understand the mining 
environment in more detail. The areas tested during this period have resources 
reported under the SAMREC code of in excess of 500,000 carats of gem grade 
diamonds and these areas will form the core focus of the new contract 
operations. 
 
Tectonic SA's management have been active on this site in various capacities 
for over 30 years. Their estimates are for average revenues of US$400 per carat 
from the grade and stone sizes returned in independent resource testing. 
 
Tectonic SA's testing activities were conducted under an arrangement with VAST 
with a view to Tectonic operating as a long-term sub-contractor under VAST's 
pre-existing mining contract. With the opportunity of becoming a prime 
contractor, the proposed sub-contractor arrangement with VAST will not be 
completed. The US$650,000 equity consideration contemplated under the proposed 
sub-contract with VAST will not be paid and no further monthly fees or 
royalties will be incurred. 
 
A prerequisite for becoming a prime contractor is establishing a compliant 
Black Economic Empowerment ("BEE") partnership under South Africa's Broad Based 
Black Economic Empowerment Act, No 53 of 2003. Tectonic has successfully 
negotiated a BEE partnership with an experienced South African mining and 
commodities trading group who will become a 26% equity shareholder via a loan 
to purchase scheme which is a common mechanism for supporting local 
empowerment. 
 
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. 
 
Mr. Brett Boynton, Managing Director - Tectonic Gold Plc 
 
We are pleased to have the opportunity to upgrade our status to a direct land 
mining contract on this project. We have an experienced team and it makes sense 
to take full control over areas such as mine planning, health and safety and 
rehabilitation works, which were subject to final approval under the proposed 
sub-contract. The improved contractual position also gives us additional 
financing flexibility. 
 
Diamond prices have softened over the past year and taking a direct contract 
enhances the revenues to Tectonic from this project, which was a key 
consideration. 
 
We look forward to working with our new empowerment partners and beginning work 
under the new contract. 
 
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

September 30, 2019 06:30 ET (10:30 GMT)