Zenith Minerals’ (ASX: ZNC) wholly owned subsidiary Black Dragon Energy has entered into a binding heads of agreement with private company Temporary Resources to acquire mining lease M77/599, which sits adjacent to its Consolidated Dulcie gold project in Western Australia.
The acquisition follows the company’s announcement this month of a maiden inferred mineral resource for the project totalling 21.3 million tonnes at 1 gram per tonne gold for 675,000 ounces.
The purchase will enhance Zenith’s control over the broader Dulcie gold system as it evaluates staged open pit and toll treatment pathways, while aligning with Zenith’s strategy of consolidating key tenure positions that support disciplined resource growth and development optionality.
Under the terms of the deal, Zenith will pay Temporary a $50,000 non-refundable deposit within five days and $1.45 million cash at settlement.
Temporary will retain a 2% net smelter return royalty over all minerals produced from M77/599 following the start of commercial production, with additional legacy royalty obligations incorporated into Zenith’s development assessment.
These include $1 per dry tonne of gold ore mined and treated and a 3% gross smelter royalty on base metals (other than gold).
Contiguous Mining Licences
Consolidated Dulcie comprises contiguous granted mining licences across six kilometres of highly-prospective strike length—including Dulcie Far North (DFN) and the Dulcie Subsurface Rights Area, acquired in June and directly along strike of DFN.
The tenements host active heap-leach mining operations that substantially de-risk the project by validating existing permitting pathways, demonstrating proven mineralisation amenable to mining and potentially accelerating the route towards gold production.
Initial drilling by Zenith in 2020 confirmed the continuity of robust gold mineralisation and highlighted extensive shallow zones that remain underexplored and open in multiple directions.
“As we advance scoping study work and assess development pathways, controlling strategic tenure within the corridor simplifies planning and strengthens our ability to unlock value from the expanded resource base,” Zenith managing director Andrew Smith said, calling the purchase a “logical and disciplined step in consolidating the company’s regional position”.
“M77/599 carries legacy royalty arrangements that are well understood and have been incorporated into our development assessment—in the context of the enlarged resource base and our evaluation of staged open pit and potential toll-treatment pathways, we consider the acquisition commercially appropriate and strategically aligned.”
Maiden Inferred Resource
Consolidated Dulcie’s maiden inferred resource was made up of 9.8Mt at 1g/t gold for 300,000oz at the Dulcie mining lease, 2.8Mt at 0.9g/t gold for 75,000oz at Dulcie North, and an updated resource of 8.7Mt at 1.1g/t gold for 300,000oz at DFN.
The estimates were based on data from 82 reverse circulation holes completed between July and November—more than doubling the project’s contained metal.
“[This] gives us the critical mass required to accelerate scoping study work and evaluate staged open pit production options with confidence,” Mr Smith said.
“The stacked lode system remains open along strike and at depth and a revised exploration target will be released shortly as we continue to build scale and development optionality.”
The company has a strong cash balance and no debt, leaving it well-funded to advance resource growth, technical studies, and development assessments.
