Vancouver – ATW Venture (ATW-V) likes the goldfields of Western Australia. Five months after buying the Burnakura gold mine the company is picking up another past-producing operation just 300 km away: the Gullewa gold-copper project.
ATW will hand over AUS$13 million and 2 million shares of ATW to Batavia Mining (BTV-A). The payment schedule starts with AUS$3 million and 2 million ATW shares handed over on completion of a National Instrument 43-101 (NI 43-101) report on the project. The remaining AUS$10 million will be transferred to Batavia in cash or ATW shares over the following three years, with the final payment coincident with the completion of a positive feasibility study.
The deal, which is currently laid out in a letter of intent, also requires ATW to immediately hand over AUS$300,000 that Batavia will use to conduct a gravity geophysical survey of Gullewa during the coming months. Geophysical exploration has thus far proven effective at Gullewa the main Deflector deposit was discovered by drill testing an aeromagnetic target.
The Gullewa project is located in the West Yilgarn goldfields, 300 km south of ATW’s Burnakura gold mine and 450 km north of Perth. The project includes 756 sq. km of mineral tenements covering prospective portions of the Gullewa greenstone belt.
According to a non-NI 43-101-complaint resource estimate, Gullewa hosts 535,000 measured tonnes grading 3.87 grams gold per tonne, 8.03 grams silver per tonne, and 1.18% copper, 1.17 million indicated tonnes grading 4.32 grams gold, 6.34 grams silver, and 0.96% copper, and 1.61 million inferred tonnes grading 6.5 grams gold, 3.41 grams silver, and 0.48% copper, most of which is contained in the Deflector deposit.
Gold mineralization was discovered in the Gullewa area in the late 1800s, with gold first produced in 1897. Up until 1942 several small open pit mines operated in the area. In 1994 NRE Mining, a subsidiary of Bounty Industries (BNT-A), restarted mining at Gullewa, building the current 800 tonne-per-day carbon-in leach gold treatment plant. NRE mined ore from three open pits and two underground mines until 1997.
In 2002 the companies that became Batavia Menzies Gold and King Solomon Mines refurbished the mill and sourced ore from four open pits, including the early stages of the Deflector deposit. By early 2003 ore only remained in the Deflector deposit, at which point the operation shut down because the existing CIL plant could not treat the polymetallic ore.
Since then Batavia has slowly considered options for advancing the project. In April 2006 the company came out with a scoping study that confirmed the viability of a refurbished crushing and milling operation incorporating a gravity and flotation process and a copper concentrator to mine the Deflector deposit. In the last two years Batavia has continued to drill the project and expand its resource but did not proceed with development.
Aside from the CIL plant, Gullewa has a licensed tailings disposal facility, a 50-person camp with offices and workshops, and haulage roads. The site is currently on care and maintenance.
ATW gained 8 on news of the acquisition to close at $1.08. The company has a 52-week trading range of 40 to $1.46 and has 41.9 million shares issued.
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