Native Mineral Resources Locks in JV to Test Gold Ground Near Blackjack Plant
Key Takeaways
- Citigold (ASX: CTO) and Native Mineral Resources (ASX: NMR) have executed a binding, unincorporated joint venture over four mining leases — ML1424, ML1430, ML10032, and ML10042 — covering 128 hectares at Charters Towers, Queensland.
- The Stockholm Tenements sit just 2km north of NMR's operating Blackjack plant, meaning any mineralisation proved up by drilling could be processed through existing infrastructure without a new capital build.
- NMR holds sole operational control and will conduct proving-up drilling first, with the right to elect into full mining only if results support it — a staged structure that disciplines capital on both sides before any commitment to production.
- Surplus proceeds are split 50:50 after Queensland mineral royalties and each party's unrecovered costs (including an 8% margin on NMR's specified cost categories) are deducted from gross smelt proceeds.
- The announcement is explicit that there is no assurance drilling will support a decision to proceed — if NMR elects not to mine following drilling assessment, the agreement terminates cleanly.
Citigold and NMR formalise joint venture over Stockholm tenements at Charters Towers
Citigold Corporation (ASX: CTO) and Native Mineral Resources (ASX: NMR) have executed a binding joint venture agreement over four mining leases at Charters Towers, Queensland, known collectively as the Stockholm Tenements.
The four tenements — ML1424 (Stockholm), ML1430 (Blackjack 4), ML10032 (Stockholm No. 1) and ML10042 (Stockholm No. 2) — cover a combined area of approximately 128 hectares. Their location, roughly 2km north of NMR’s existing Blackjack Operations, establishes the practical logic of the arrangement from the outset: if proving-up drilling succeeds, material could be hauled and processed through NMR’s already-operating Blackjack plant.
The tenements are located approximately 7km southwest of central Charters Towers, adjacent to Diamantina Road, and encompass the historic Stockholm open pit along with associated historical mining disturbance, including rock and topsoil stockpiles and access roads.
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What is a joint venture and why does it matter here?
An unincorporated contractual joint venture in a mining context means two companies pool tenements and operational capability without forming a separate legal entity. The arrangement sits somewhere between a simple agreement and a full merger of assets — each party retains its own identity and legal obligations while sharing access and upside.
The “staged” model is worth understanding. Rather than committing immediately to mining, NMR first undertakes proving-up drilling to establish whether mineralisation is economically viable. This disciplines capital on both sides: neither party over-commits before the ground has been tested.
In this specific deal, Citigold contributes the tenements and retains registered ownership. NMR contributes operational capability and takes sole operational control. Each party gains without a full upfront capital commitment, and if the drilling results don’t support development, the agreement terminates cleanly.
NMR’s joint venture approach to Queensland gold has become a recurring structural feature of its growth model, with staged agreements allowing the company to assess mineralised material close to existing operations before committing capital to acquisition.
How the deal works — terms, control and surplus sharing
The structure is staged and disciplined: drilling results gate the decision to proceed, and costs are recovered from production proceeds before any surplus is divided. Key features of the arrangement include:
- NMR holds exclusive right to undertake proving-up drilling with sole operational control
- NMR may elect to proceed with mining and process material through the Blackjack plant following drilling assessment
- Citigold remains the registered tenement holder and maintains environmental authority obligations throughout
- If NMR elects not to proceed following drilling assessment, the agreement terminates in accordance with its terms
| Term | Structure | Detail |
|---|---|---|
| Cost recovery | NMR recovers costs actually and reasonably incurred, including an 8% margin on specified cost categories | Citigold recovers the environmental authority annual fee and defined Statutory Fees actually incurred after the Agreement Date |
| Surplus sharing | Per smelt event: Queensland mineral royalty, unrecovered NMR costs and unrecovered Citigold costs deducted from gross smelt proceeds first | Remaining surplus split 50:50; unrecovered costs carry forward to later smelt events |
| Operational control | NMR — sole control | Covers drilling, mine planning, contractors, processing, blending, transport, refining and sale |
| Tenement ownership | Citigold — registered holder | Responsible for maintaining tenements in good standing and maintaining the applicable environmental authority |
| Termination | Post decision-to-proceed, NMR may exit with at least 30 days’ written notice | Subject to NMR’s safety, removal and rehabilitation obligations |
Mark Lynch, Executive Chairman, Citigold Corporation
“The Stockholm joint venture brings together Citigold’s Charters Towers tenements and NMR’s established operational and processing capabilities. The staged approach allows the parties to first establish the potential of the Stockholm tenement mineralisation through proving-up drilling before committing to mining operations…”
Blake Cannavo, Managing Director & CEO, Native Mineral Resources
“The Stockholm joint venture provides NMR with a staged opportunity to assess additional mineralised material close to our Charters Towers operations without acquiring the tenements…”
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What happens next
The next steps flow logically from the structure of the deal, though the announcement is explicit that there is no assurance drilling will support a decision to proceed or that mining operations will commence.
- NMR will progress detailed planning for the proving-up drilling programme, including the proposed drilling sequence, contractor requirements, and applicable operational and regulatory arrangements.
- Citigold will continue maintaining the JV Tenements, environmental authority, and its statutory obligations throughout the drilling phase.
- If drilling results support development, NMR may elect to proceed with mining and processing through the Blackjack plant — potentially providing an additional feed source for those operations.
- Both companies will provide further updates as material information becomes available.
Investors exploring how NMR is financing its operational expansion in Queensland can find our detailed coverage of NMR’s $3.5 million convertible note with Lind Partners, which walks through the capital structure underpinning the company’s ability to fund drilling programmes and processing commitments across multiple projects.
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