AngloGold sells Coyote to Tanami

Vancouver — Perth-based Tanami Gold has picked up the prospective Coyote deposit, 150 km north of Callie in Western Australia.

Coyote is part of the Western Tanami project, which had been held by AngloGold (AU-N). AngloGold agreed to sell Western Tanami to the junior in return for A$9 million and 25 million shares. The major will also receive royalty payments of A13 for each ounce of gold produced from 301,000 to 400,000 oz., A10 for production between 401,000 and 500,000 oz., and A5 for production of 5001,000-1 million oz.

AngloGold acquired the Coyote project in its takeover of Acacia Resources in 2000. Drilling has defined the high-grade Buggsy-Gonzalez structure over an 800-metre strike length to a depth of 250 metres. Significant intercepts include 19 metres grading 21.2 grams gold per tonne and 11 metres grading 75.6 grams gold. The Sylvestor structure, which runs parallel to the Buggsy-Gonzalez structure, returned 11 metres grading 6 grams gold. AngloGold has explored for satellite deposits around the Coyote deposit, meeting with positive results at the Pebbles and Rabies areas.

At last report, Coyote held some 350,000 oz. gold.

In recent years, the remote Tanami Goldfields has attracted the attention of an increasing number of majors. The emerging province has produced more than 4.1 million oz. gold, and the current resource inventory is pegged at 11 million oz. gold.

In the first half of the 20th century, the region produced only 14,000 oz. gold from narrow quartz veins. In the 1970s, Australian-based North Flinders Mines (NFM) re-evaluated the area, eventually defining a mining reserve of 1.9 million tonnes grading 8 grams gold. In 1991, the company was taken over by Normandy Poseidon, which, in turn, became Normandy Mining in 1996. Normandy was subsequently taken over by Newmont Mining (NEM-N).

Normandy NFM is the largest single gold producer in the Northern Territory, with gold mining operations in the Tanami region at the Granites, 500 km northwest of Alice Springs, and at Dead Bullock Ridge, a further 40 km to the west. The company expanded following development, in 1998, of the Callie deposit, which was initially defined as 10 million tonnes grading 7 grams gold.

Late in 2000, Homestake Mining, which has since merged into Barrick Gold (ABX-T), agreed to inject A$1.5 million into Tanami Gold. Through a private placement, the major picked up at 7.5% stake in the junior. The deal paved the way for Barrick to get involved in several projects held by Tanami.