Barton Gold (ASX: BGD) has sent notifications of its intention to withdraw from the WGC and the Sandstone joint ventures in South Australia after a settlement offer to the other JV partners lapsed.
Barton became party to the Sandstone JV relating to tenements EL5998 and EL6569 (known as the Sandstone tenements) and the WGC JV relating to the Sandstone tenements, EL6625, EL6012, EL6173, EL6532, and the southern portion of EL6502 (WGCJV tenements) in 2019.
Under those agreements, Barton held net interest of approximately 19% and gold rights interests of approximately 21% in the Sandstone and WGCJV Tenements, located in the vicinity of the company’s Central Gawler mill, respectively.
Through a 2016 dispute settlement term sheet, Barton retained 100% ownership of all mineral rights (except iron ore) on the northern portion of EL6502.
Settlement offer lapsed
On 3 August 2023 the company responded to public claims by its WGCJV partner, Half Moon Pty Ltd (HMP), and HMP’s owner, Marmota, relating to the WGCJV and the term sheet.
Barton alleges that HMP failed to respond to its settlement offer on time and that the deal has now lapsed.
The company has now sent notices withdrawing from the WGCJV and the Sandstone JV to HMP and the Sandstone JV partner, Coombedown Resources Pty Ltd (CBD).
Multiple attempts to settle
Barton managing director, Alex Scanlon, said the withdrawal from the joint ventures has no relation to or effect upon the company’s main project areas of focus at the Tarcoola gold project and the Tunkillia gold project or its 100% ownership of the Central Gawler mill.
“Notwithstanding our position on the matter, we have made multiple attempts to settle the ongoing dispute on terms which we believe are commercially attractive to HMP, and far superior to any outcome they might hope to reasonably achieve in litigation,” Scanlon said.
“Based upon HMP’s conduct, we do not see any prospect for a constructive future relationship or, therefore, any merit in maintaining these joint venture interests. They are not material to our larger regional strategy, and in any event are unlikely to be commercially viable without substantial investment and access to an existing mill.”
“We believe that any claim by Marmota would be ill-advised. However, if necessary, we will vigorously defend our position and bring a substantial counterclaim.”
“The termination of these joint ventures is a significant and welcome simplification of our regional holdings which eliminates a low value, time consuming distraction and allows us to sharpen our focus on the core mission of building a long-term, multi-million ounce development platform at the Tarcoola and Tunkillia projects.”
Current focus on Tunkillia gold
Withdrawing from the disputed JV’s will allow Barton to continue its major focus on its exciting Tarcoola and Tunkillia projects.
The company is currently undertaking a drilling campaign aimed at significantly expanding the Tunkillia resource utilising specialist track mounted rig which is able to proceed through the sandy terrain at the location.
The initial program of approximately 7,500 metres is planned to test potential northern and southern extensions of an April 2023, block model of the 223 deposit, along with other areas with potential to increase thickness and/or grade.
The program is expected to help add detail for a further updated mineral resource estimate for Tunkillia, with the historic project’s total mineralised footprint having grown significantly under Barton’s ownership, including the discovery of three new satellite gold zones since November 2021.
Results of the current program will build on the updated mineral resources estimate (MRE) for Tunkillia’s 223 deposit released in late April 2023 which added approximately 12 million tonnes to the MRE with approximately 189,000 new ounces added for only $12 per ounce (all inclusive).
