AngloGold dishes Tanami

Vancouver Perth-based Tanami Gold has picked up the prospective Coyote gold deposit in northern Western Australia.

AngloGold (AU-N) agreed to sell its Western Tanami project, which holds the deposit, to the junior in return for A$9 million and 25 million shares. The major will also receive royalty payments of A$0.15 for each oz of gold produced from 301,000 to 400,000 oz., A$0.10 for production between 401,000 to 500,000 oz and A$0.05 for production ranging from 5001,000 to 1 million oz.

AngloGold acquired the Coyote project, 150-km northwest of Callie, as a result of the takeover of Acacia Resources in 2000. The project, which lies in Western Australia, near the border with the Northern Territories, holds considerable promise. Drilling to date has defined the high-grade Buggsy-Gonzalez structure over an 800-metre strike length to a depth of 250 metres. Significant intercepts included 19 metres at 21.2 grams gold and 11 metres at 75.6 grams gold. In addition, the Sylvestor structure, which runs parallel to the Buggsy-Gonzalez structure, returned 11 metres grading 6 grams gold. Grassroots exploration continued to search for satellite deposits around the Coyote Project, with positive results at the Pebbles and Rabies projects.

At last report the deposit held some 350,000 oz. of gold, too small for the South African major.

The remote Tanami Goldfields has attracted the attention of most of the majors over the past few years. The emerging province has produced over 4.1 million oz. gold and has a current resource inventory of 11 million oz.

Discovered at the beginning of the 20th century, the region produced only a minor amount of gold (14,000 oz.) from narrow quartz veins. In the 1970s, Australian-based North Flinders Mines (NFM) re-evaluated the area, eventually defining a mining reserve of 1.9 million tonnes grading 8 grams gold. In 1991, the company was taken over by Normandy Poseidon, which, in turn, became Normandy Mining in 1996. Normandy NFM is the largest single gold producer in the Northern Territory, with gold mining operations in the Tanami region at the Granites, 500 km northwest of Alice Springs, and at Dead Bullock Ridge, a further 40 km to the west. The company made the transition to a large mining operation following development of the Callie deposit in 1998, initially defined as 10 million tonnes grading 7 grams gold.

Late in 2000, Homestake Mining (which has since merged into Barrick Gold (ABX-T)), agreed to inject A$1.5 million into Tanami Gold. Through a private placement, the major picked up at 7.5% stake in the junior. The deal paved the way for Barrick to get involved in several projects on various highly prospective areas within Tanami’s extensive portfolio.