Citigold Locks in JV to Drill Stockholm Tenements With No Exploration Spend
Key Takeaways
- Citigold (ASX: CTO) has executed a binding joint venture agreement with Native Mineral Resources (ASX: NMR) over four mining leases totalling 128 hectares at Charters Towers, Queensland.
- NMR funds and operates all proving-up drilling and any subsequent mining, while Citigold retains tenement ownership and faces zero exploration expenditure under the deal structure.
- The economic waterfall splits any surplus 50:50 after deducting Queensland mineral royalties, NMR's unrecovered costs (including an 8% margin on specified categories), and Citigold's statutory fees.
- The JV Tenements sit approximately 2km from NMR's existing Blackjack Operations, meaning any future ore haulage to the Blackjack processing plant would cover a short distance — a meaningful operational cost factor.
- Proving-up drilling results will determine whether NMR elects to proceed to mining; if NMR does not proceed, the agreement terminates — no mining outcome is assured at this stage.
Citigold secures joint venture to unlock Stockholm tenements at Charters Towers
Citigold Corporation (ASX: CTO) has executed a binding joint venture agreement with Native Mineral Resources (ASX: NMR) over four mining leases at Charters Towers, Queensland. The deal covers ML1424 (Stockholm), ML1430 (Blackjack 4), ML10032 (Stockholm No. 1), and ML10042 (Stockholm No. 2), a combined area of approximately 128 hectares sitting roughly 2km north of NMR’s existing Blackjack Operations. For Citigold, the structure is a no-exploration-spend arrangement: it retains tenement ownership while NMR funds and operates the proving-up drilling.
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What the Stockholm JV means for both companies
NMR leads the drill, Citigold holds the ground
The agreement is structured as an unincorporated contractual joint venture, with a clear division of responsibility. NMR holds the exclusive right to undertake exploration and proving-up drilling and retains sole operational control of that work, as well as any subsequent mining operations, subject to applicable approvals and the terms of the agreement. Citigold remains the registered holder of the JV Tenements and continues to maintain the environmental authority and its relevant statutory obligations.
This is a staged, disciplined structure by design. Proving-up drilling comes first; a decision on whether to proceed to mining follows only once assay results have been assessed. If NMR elects not to proceed, the agreement terminates in accordance with its terms. There is no assurance the drilling will support a decision to proceed or that mining operations will commence.
The commercial logic for Citigold is straightforward: it gains the potential to monetise existing tenements without taking on exploration expenditure or operational exposure.
How the economics are structured
For investors unfamiliar with joint venture economics in a mining context, the surplus-sharing waterfall here works as follows. For each smelt event, the following deductions are made from gross smelt proceeds:
- Queensland mineral royalty deducted from gross smelt proceeds
- Unrecovered NMR costs deducted (including an 8% margin on specified cost categories)
- Unrecovered Citigold costs deducted (the environmental authority annual fee and defined Statutory Fees actually incurred after the agreement date)
- Any remaining surplus split 50:50 between NMR and Citigold
Unrecovered costs carry forward to later smelt events. No dollar figures for costs or projected revenues are disclosed in the announcement, and none should be assumed.
The Stockholm tenements — what Citigold brings to the table
The JV Tenements are located approximately 7km southwest of central Charters Towers, adjacent to Diamantina Road. The area encompasses the historic Stockholm open pit and associated historical mining disturbance, including rock and topsoil stockpiles and access roads. That existing infrastructure is relevant context for any future operational planning, though it does not predetermine outcomes.
| Tenement ID | Tenement Name | Area (ha) |
|---|---|---|
| ML1424 | Stockholm | 8.425 |
| ML1430 | Black Jack 4 | 117.5 |
| ML10032 | Stockholm No. 1 | 1.197 |
| ML10042 | Stockholm No. 2 | 0.887 |
| Total | — | 128.009 |
The proximity of the JV Tenements to NMR’s Blackjack plant (approximately 2km) is a practical consideration. Should mining proceed, haulage distances are contained, which is a meaningful operational factor in any future cost assessment.
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What happens next
Proving-up drilling is the immediate priority
NMR will now progress detailed planning for the proving-up drilling program, covering the proposed drilling sequence, contractor requirements, and applicable operational and regulatory arrangements. The staged pathway from here is:
- NMR completes the proving-up drilling program
- Assay results are assessed
- NMR elects to proceed (or the agreement terminates)
- If proceeding: mining, haulage, and processing through the Blackjack plant
Citigold has stated it will provide further updates as material information becomes available.
Director perspectives
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. If the results support development, the joint venture provides a practical pathway to bring additional mineralised material into production for the benefit of both companies.”
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. We will first complete proving-up drilling before deciding if mining should proceed. If successful, the joint venture could provide an additional source of feed for our Blackjack operations.”
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