Months after long-term PNG explorer Frontier Resources pulled out, and recapitalised as West Australia-focused rare earth explorer Lanthanein Resources, WA-focused copper explorer Tempest Minerals has decided to move into Frontier's old neighbourhood.
It has struck deal terms with company linked to Tempest chair and lawyer Brian Moller, who is one of 10 directors at PNG-based Lole Mining.
Lole, founded by former PNG chief inspector of mines Howard Lole, has been working for the past few years on resurrecting the Tolukuma gold-silver mine, a development that could cost as much as $A250 million.
Subject to conditions, including a capital raising, due diligence, and shareholder approval, Tempest has agreed to issue $25.7 million in new shares, priced at 5.4c per share to merge with Lole.
The deal comes with the fully permitted Tolukuma mine, some 2000sq.km of surrounding exploration tenure, much of it previously owned by Frontier, and the Mt Penck exploration project, once partially owned by Australia's Macmin Silver via a shareholding in New Guinea Gold.
First discovered by Kennecott in the 1960s, Tolukuma produced more than millions of ounces of precious metals intermittently between 1995 and 2005.
The mine is on care and maintenance, and dewatering of the existing workings has commenced, with the aim of pulling out ore again, and allowing extensional drilling.
The infrastructure has an estimated replacement cost of some $200 million.
The mine, located 100km north of Port Moresby in the Owen Stanley complex, sits within the same geology as multi-million-ounce Grasberg, Wafi-Golpu and Porgera deposits - some of the biggest gold and copper mines in the planet.
While not in the same class, Tolukuma has given up 1Moz gold and 2.4Moz silver from small open pit and underground operations from, and has legacy non-JORC resources Tempest is looking to update.
Lole was recently granted a 10-year extension to the Tolukuma mining lease.
It also recently purchased Frontier's Tolukuma extension lease and Gazelle-Sinivit application for up to $3 million cash and shares.
Tolukuma Extension contains a 128,000oz inferred resource for the Saki deposit, 3km from the mine. It also hosts a number of high-grade vein prospects such as Kimono and Kimono South.
Tolukuma produced about 60,000ozpa at its height, but Lole is looking to replicate K92 Mining's analogous Kainantu mine in the Eastern Highlands and target production between 160,000-200,000ozpa over time.
The Mt Penck project, in West New Britain province, contains a high sulphidation epithermal system, likely fed by underlying porphyries.
It sits within the Kulu-Simi regional structure, within the New Britain arc that also hosts the 60Moz Lihir deposit.
The area has not been explored in a decade, primarily with surface sampling that returned up to 49gpt in rock chips.
There are several soil anomalies that did not see follow-up work, as they were lost in the consolidation of projects under Newcrest Mining.
The limited drilling returned 12m at 5gpt gold at Kavola. An historical resource at Kavola East was estimated at more than 140,000oz.
Tempest managing director Don Smith described the merger as "a major milestone" for the company, allowing it to position itself as a near-term gold producer in areas with "enormous copper and gold potential", while advancing its projects in WA's Yalgoo region.
Tempest raised $8.4 million at 8.5c in April off the back of its Orion copper discovery at Meleya, which it believes has potential to be a Golden Grove-style deposit. Assays are still pending.
The company has more than 900sq.km of ground at Yalgoo.
The company listed in 2017 as Lithium Consolidated but changed its name and focus in mid-2020.
Its shares have traded as low as 1.4c over the past year and peaked at 21.5c in April.
The stock jumped more than 30% on Friday to 5.