Rationalisation of Minority Joint Venture Interests
Adelaide, Sep 1, 2023 AEST (ABN Newswire) - Barton Gold Holdings Limited (
ASX:BGD) (BGD3:FRA) (BGDFF:OTCMKTS) and its subsidiary Challenger 2 Pty Ltd (Barton or Company) provide the following update as to Barton's minority joint venture interests.
In 2019 Barton became party to the Sandstone JV relating to tenements EL5998 and EL6569 (Sandstone Tenements) and the WGCJV relating to the Sandstone Tenements, EL6625, EL6012, EL6173, EL6532, and the southern portion of EL6502 (WGCJV Tenements) in the vicinity of the Central Gawler Mill.1 Barton held net ~19% and ~21% gold rights interests in the Sandstone and WGCJV Tenements, respectively.
Pursuant to the Dispute Settlement Term Sheet dated September 2016 (Term Sheet), the Company retains 100% ownership of all mineral rights (except iron ore) on the northern portion of EL6502.
On 3 August 2023 the Company responded to public claims by its WGCJV partner, Half Moon Pty Ltd (HMP), and HMP's owner, Marmota Limited (Marmota), relating to the WGCJV and the Term Sheet. HMP did not respond to Barton's settlement offer by the 5pm ACST 31 August 2023 deadline. It therefore lapsed. Barton has now sent notices withdrawing from the WGCJV and the Sandstone JV to HMP and the Sandstone JV partner, Coombedown Resources Pty Ltd (CBD). Pursuant to these notices:
a) the Sandstone JV withdrawal takes effect on the date of service, and Barton will seek to transfer its titled interest in the Sandstone Tenements to CBD;
b) the WGCJV withdrawal takes effect 45 business days from the date of service, from which time the WGCJV Tenements (excluding the Sandstone Tenements) will no longer be subject to the WGCJV and will be 100% owned by Barton, Barton's 21.16% WGCJV gold rights will transfer to HMP, and HMP will own 100% of the gold rights thereupon; and
c) the Company's JORC Mineral Resources will reduce by ~61.4koz Au when the withdrawal process is completed.
The withdrawal from the joint ventures has no relation to or effect upon Barton's main project areas of focus at the Tarcoola Gold Project (Tarcoola) and the Tunkillia Gold Project (Tunkillia), or its 100% ownership of the Central Gawler Mill.
No Historical Rehabilitation Liability on Sandstone Tenements
In South Australia, exploration rehabilitation is a statutory obligation which rests with a tenement owner.
All historical exploration work on the Sandstone Tenements has been rehabilitated. Accordingly, it is the Company's understanding that the transfer of the Company's interests in the Sandstone Tenements can occur without any historical rehabilitation liabilities.
Barton will retain 100% title and all mineral rights (except gold) to the remaining WGCJV Tenements (ie. excluding the Sandstone Tenements), which will no longer be subject to the WGCJV. When acquired by Barton, those tenements had 3,394 shallow rotary air blast (RAB) and aircore (AC) historical drill holes.
Barton believes that some, but not all, of these drill holes may require rehabilitation. Barton is working with the State to evaluate and implement any such rehabilitation in due course over a multi-year period, with an estimated rehabilitation cost of less than $300,000.
No Residual WGCJV Budget Obligations
All WGCJV expenditure must be incurred pursuant to a program and budget approved by the JV 'Operating Committee' (Program and Budget) for each 6 month period commencing on 1 January and 1 July (Budget Period). Barton is not aware of any Program and Budget having been approved by the Operating Committee at a properly convened meeting since 1 January 2023. Barton has paid all sums due and payable by Barton which relate to approved Programs and Budgets prior to 1 January 2023.
Access and Other Claims
Marmota's claims published on 13 July 2023 include an allegation that Barton has improperly denied HMP access to the Sandstone Tenements under the WGCJV agreement.
Notwithstanding the Company's view that these claims are without merit, and that the fact that HMP and Marmota have refused Barton's offers for exploration access subject only to an industry standard access agreement, the termination of the WGCJV ends any question of access entitlements going forward.
Subject to CBD becoming the 100% owner of the Sandstone Tenements, future access thereto by HMP will be a matter for discussion between HMP and CBD.
Barton also continues to reject the balance of the claims made in Marmota's 13 July 2023 ASX statement in full as without merit, and refers to its ASX statement published on 3 August 2023.
Commenting on the matter, Barton MD Alex Scanlon said:
"Notwithstanding our position on the matter, we have made multiple attempts to settle the ongoing dispute on terms which we believe are commercially attractive to HMP, and far superior to any outcome they might hope to reasonably achieve in litigation.
"Based upon HMP's conduct, we do not see any prospect for a constructive future relationship or, therefore, any merit in maintaining these joint venture interests. They are not material to our larger regional strategy, and in any event are unlikely to be commercially viable without substantial investment and access to an existing mill.
"For the reasons detailed in our 3 August 2023 ASX statement, we believe that any claim by Marmota would be ill-advised. However, if necessary, we will vigorously defend our position and bring a substantial counterclaim.
"The termination of these joint ventures is a significant and welcome simplification of our regional holdings which eliminates a low value, time consuming distraction and allows us to sharpen our focus on the core mission of building a long-term, multi-million ounce development platform at the Tarcoola and Tunkillia Projects."
About Barton Gold Holdings Limited
Barton Gold Holdings Limited (ASX:BGD) (FRA:BGD3) (OTCQB:BGDFF) is an ASX listed Australian gold exploration company with a total attributable ~1.1Moz Au JORC (2012) Mineral Resources endowment (28.74Mt @ 1.2 g/t Au), a pipeline of advanced exploration projects and brownfield mines, and 100% ownership of the only regional gold mill in the central Gawler Craton of South Australia.
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