PNG-focused Crater Gold Mining is back trading on the ASX and plans a transformation. The company is raising funds to retire material debt and pursue a new strategy at its flagship Crater Mountain project, intends to appoint recognised mining industry leaders to the board and proposes a name change to Paradise Gold Mining.

The company plans an entitlement offer to raise at least A$13 million and up to approximately A$15 million before costs, and has agreed to sell its non-core Croydon project in Queensland for A$1.2 million in cash to Freefire Technology.

It also plans a series of associated initiatives to refocus the company and accelerate development of Crater Mountain. The new funding will retire material debt and leave $4.3 million to $5.1 million in cash to pursue the strategy.

Crater Mountain is highly prospective and has two separate existing epithermal gold inferred resources, which in combination host in excess of 800,000 ounces of gold. These resources were established with approximately 14,500 cumulative linear metres of drilling that mainly took place in 2010-2013. At the time, the company enjoyed a market capitalisation in the $35-50 million range.

The company got side-tracked in the last 3-4 years by making its main focus the proposed development a small-scale mining operation and taking on a debt burden to do so. During that time physical exploration activity was dramatically scaled back.

Under its new strategy, Crater Gold aims for a transformational increase in resources via an aggressively re-invigorated exploration program. It intends to purchase two drill rigs to be permanently based at Crater Mountain and ramp annual drilling activity up to in excess of 10,000 cumulative linear metres.

Key exploration targets include:

• Increase in mineral inventory at the High Grade Zone (HGZ) of Nevera prospect, which has a JORC inferred resource of 17,100 ounces of gold at 11.9 g/t. Down dip and eastwards extensions will be targeted with the aim to expand the resource to 60,000-100,000 ounces.

• Test the South Artisanal Works (SAW) approximately 430 metres south of HGZ for potential as a second HGZ-style high-grade epithermal gold zone.

• Drill the approximately 300 metre area between the HGZ and 790,000 ounce Mixing Zone

(MZ) inferred resource with the potential for continuous mineralisation.

• Multiple longer drill-holes to properly test known targets for porphyry copper-gold mineralisation, starting with the area approximately 600 metres to the south of MZ and HGZ.

• First drill-testing of the three prospective non-Nevera prospects, starting with Nimi, which has a similar geological setting to Nevera and historical rock chip samples with high gold content.

Subject to metallurgical testing and detailed mine planning, development of the Nevera Gold

Mine at HGZ is likely to be resumed to create a modest and sustainable commercial gold operation to partly self-fund expanded exploration activities.

Nevera mine has an existing plant capable of producing 200-250 ounces of payable gold per month, based on existing plant equipment capacities, assuming 600 tonnes of ore processed per month with a feed grade of 18-21 g/t and processing recovery of 50-60%. Subject to conformational studies it is likely that the plant will be relocated to a lower level with the aim to complete development of a new adit at the 1930 level to access the highest grade N1 and L1 veins within HGZ resource.

Sam Chan and Richard Johnson have agreed to resign from the Board and three new proposed directors have agreed to join on completion of the entitlement offer:

• Alexander Molyneux, proposed chairman – 20-years’ experience in the industry as an executive, director and specialist industry investment banker. He is non-executive chairman of Argosy Minerals and was non-executive director of Goldrock Mines Corp from 2012 until its acquisition by Fortuna Silver in 2016. He is currently non-executive chairman of Azarga Metals Corp and cornerstone shareholder of Azarga Uranium Corp.

• Dorian L (Dusty) Nicol, proposed non-executive director – Career geologist with over 40-years’ experience in discovery and resource development. Worked extensively in PNG for Esso Minerals and Rennison Gold Fields, including on Crater Mountain and Kainantu projects.

• Robert Usher, proposed non-executive director – Mining engineer with more than 25-years’ experience. Former executive general manager of PanAust Asia from 2006 to 2014. Significant gold production experience including in PNG with Placer Dome at its Porgera operation.

Matthew O’Kane has agreed to join the company as chief financial officer on completion of the entitlement offer. He has an MBA and is a CPA with more than 20-years’ experience as a finance professional in the automotive and minerals sectors.

Curtis Church joined the company on July 1 as PNG country manager to manage activities at the Crater Mountain project site. On completion of the entitlement offer, he will be appointed chief operating officer.

Subject to shareholder approval and to represent the transformation, it is proposed the company will change its name to Paradise Gold Mining.

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