TNG Limited has reached agreement with privately-owned Chinese resource company Teng Fei Mining Ltd to enter into a new venture covering the Legune high-grade hematite prospect on its Manbarrum Zinc-Silver Project in Australia’s Northern Territory.
In 2009, TNG sold 100% of the mineral rights for the hematite prospect to Teng Fei for $1.4 million. Teng Fei is a Darwin-based company backed by a private consortium of Chinese investors with operations in the chemicals and mining industry of China.
Under the new agreement, TNG has secured an immediate 100% interest in the prospect for no consideration but Teng Fei will retain a 3% royalty on any future production from the tenement.
The Legune hematite prospect was originally discovered by TNG in 2008. High-grade hematite grading up to 67% iron occurs on top of a hill within the Manbarrum Zinc-Silver Project licence area.
The prospectivity of the hill at the time was considered high and could be the result of either an iron cap to an additional zinc-lead-silver MVT deposit or a prominent ironstone cap produced by the weathering of iron sulphides associated with the prevalent Mississippi Valley Type (MVT) base metal deposits in the area.
Recent reconnaissance exploration, following agreement with the Traditional Owners, has confirmed that the Legune prospect comprises a low-lying hill with an extensive hematite cap. It is about 900 metres-long and 500 metres-wide with an unknown depth extent.
Geological mapping has confirmed that this outcrop forms part of a large hematite-rich zone. A cliff face on the side of the hill revealed that the hematite appears continuous over at least a 6 metres vertical section. Portable NITON XRF results confirm that the iron content of the hematite extends over the entire area with a majority of the results having returned assay results over 50% iron and up to 67%.
Chemical analyses results from a Niton XRF portable analyser model XLt may not be representative of the whole sample, nor should they be seen as a substitute for laboratory based chemical analysis.
Since the time of concluding the original agreement, Teng Fei has been unable to conduct any work on the area and approached TNG for assistance. Negotiations on this progressed recently when the Manbarrum project returned to TNG after KBL Mining withdrew from a farm-in arrangement.
TNG’s managing director Paul Burton says he is pleased to have concluded a new agreement with Teng Fei to progress exploration activities at this highly prospective target. “It is unfortunate that Teng Fei was unable to complete any work and fortunate for TNG and our shareholders that TNG is now back in the driving seat at this project. This is consistent with our focus for adding value to our non-core assets wherever possible while maintaining our core focus on our flagship Mount Peake Project.
“As a potentially exciting emerging iron ore discovery, the Legune project fits with our corporate focus in the ferrous and strategic metals space.”
Under the agreement TNG will formulate a drill program to test the prospect as soon as access is available.
The Manbarrum project remains a significant strategic iron and base metal asset in a highly prospective region. The project comprises two large deposits, Sandy Creek and Djibitgun, containing extensive zinc-lead-silver mineralization plus numerous untested exploration prospects.