Native Mineral Resources Strikes Strategic Joint Venture to Access 51,100oz Gold Resource
Native Mineral Resources Holdings Limited (ASX: NMR) has executed a binding term sheet with Great Divide Mining Ltd (ASX: GDM) to form an unincorporated joint venture that could significantly expand gold production at NMR's refurbished Blackjack Operations in northern Queensland. The partnership centres on processing ore from GDM's Yellow Jack Gold Project, which holds a maiden Inferred Mineral Resource Estimate of 1.84Mt at 0.86 g/t gold for 51,100oz contained gold.
Under the agreement, GDM will cover all operational costs including mining, transportation, and processing, whilst profits are split equally between the partners after costs. This arrangement allows Native Mineral Resources to maximise utilisation of its recently recommissioned Blackjack Plant without additional capital investment, whilst GDM secures a viable processing solution for its Yellow Jack resource.
The joint venture is subject to a nine-month due diligence period and represents a strategic move to establish Blackjack as a central gold processing hub in the Charters Towers region.
Joint Venture Structure Creates Win-Win Partnership
The proposed joint venture establishes an equal partnership between Native Mineral Resources and GDM, with several key operational advantages:
| Aspect | Details |
|---|---|
| Resource Size | 1.84Mt at 0.86 g/t gold (51,100oz contained) |
| Distance to Plant | ~280km from Yellow Jack to Blackjack |
| Cost Structure | GDM pays all mining, transport & processing costs |
| Profit Split | 50-50 after cost recovery |
| Resource Type | Oxide gold (easier processing) |
The Yellow Jack project remains open at depth and along strike, with initial drilling limited to only 70m vertical depth, suggesting significant exploration upside potential. GDM completed confirmatory drilling in January 2024 but postponed optimisation studies whilst seeking processing options, a gap now filled by this partnership.
Furthermore, the operational structure eliminates capital risk for Native Mineral Resources whilst providing GDM with immediate access to proven processing infrastructure. This model could establish a template for future partnerships as regional exploration activity increases.
"We are pleased to sign a JV with Great Divide Mining over the Yellow Jack Project, which underlines our capabilities and capacity to process additional ore at our Blackjack Operations… we now can grow the Blackjack Plant's output and become a central hub for gold processing in the Charters Towers region," said Blake Cannavo, NMR Managing Director & CEO.
Understanding Oxide Gold Resources: A Processing Advantage
Oxide gold resources represent a significant processing advantage compared to sulphide ores, making the Yellow Jack project particularly attractive for the joint venture.
What are Oxide Gold Resources?
Oxide gold occurs when primary gold-bearing sulphide minerals have been weathered and oxidised near the surface. This weathering process breaks down complex sulphide minerals, leaving gold in a more accessible form that's easier and cheaper to extract.
The oxidation process typically affects the upper portions of gold deposits, where exposure to oxygen and water over millions of years has chemically altered the original minerals. Unlike sulphide ores, which contain gold locked within complex mineral structures requiring intensive processing, oxide gold exists in simpler forms that respond better to conventional extraction methods.
Why This Matters for Investors
Oxide gold deposits offer several compelling advantages that directly impact project economics:
Lower Processing Costs: Oxide ores typically require simpler processing methods, reducing chemical consumption and energy requirements. This translates to improved profit margins per ounce of gold produced.
Faster Extraction: Reduced processing time compared to sulphide ores means higher throughput rates and quicker cash flow generation. However, plants can process oxide ore more efficiently, maximising equipment utilisation.
Higher Recovery Rates: Oxide ores often achieve better gold recovery percentages, meaning more gold is extracted from each tonne of ore processed. This improves the overall economics of mining operations.
Reduced Environmental Impact: Less chemical processing required means lower environmental compliance costs and simplified permitting processes.
For instance, NMR's Blackjack Plant processing oxide gold from Yellow Jack should integrate seamlessly with existing operations whilst potentially improving overall plant efficiency and profitability. The plant's recent refurbishment positions it well to handle oxide ore processing, creating optimal conditions for the partnership's success.
Strategic Timeline and Next Steps
The joint venture follows a structured development pathway with clear milestones designed to protect both parties' interests:
Immediate Phase (0-9 months)
- Complete financial and technical due diligence on both parties' assets
- Execute definitive joint venture agreements
- Obtain any required shareholder approvals for the partnership structure
Development Phase
- GDM to finalise mining and environmental studies for Yellow Jack
- Complete mining lease application for Yellow Jack project
- Secure environmental authorities and regulatory approvals
Operational Phase
- Commence mining operations at Yellow Jack
- Begin ore haulage to Blackjack Plant (approximately 280km)
- Process Yellow Jack ore alongside existing Blackjack and Far Fanning deposits
The partnership includes termination rights if conditions precedent aren't satisfied within the nine-month due diligence period, providing appropriate risk management for both parties. In addition, this structure ensures that both companies can withdraw if technical or financial due diligence reveals unforeseen challenges.
Additionally, the agreement maintains each party's absolute control over their respective properties, with Native Mineral Resources retaining full ownership of its Blackjack operations whilst GDM maintains ownership of Yellow Jack. This structure preserves individual asset value whilst enabling collaborative extraction.
Investment Thesis: Maximising Plant Utilisation Without Capital Risk
This joint venture represents a compelling value proposition for NMR investors across multiple dimensions:
| Investment Driver | Value Creation |
|---|---|
| Asset Utilisation | Maximise Blackjack Plant capacity without additional capex |
| Risk Mitigation | GDM covers all operational costs and mining risks |
| Cash Flow | 50% profit share with no upfront investment required |
| Growth Platform | Establishes hub model for regional processing |
Operational Synergies
The partnership leverages Native Mineral Resources' recently refurbished processing infrastructure whilst providing GDM with an immediate path to production. With NMR having recommenced gold production at Blackjack in July 2025, the plant has demonstrated operational capability and possesses spare capacity for additional throughput.
The 280km distance between Yellow Jack and Blackjack, whilst significant, remains economically viable for high-grade oxide ore. Transport costs will be absorbed by GDM under the agreement structure, eliminating logistics risk for Native Mineral Resources.
Market Positioning
The agreement positions NMR as a regional processing hub in the Charters Towers district, potentially attracting additional toll processing opportunities. Furthermore, a third-party study currently underway to optimise plant processing and upgrade throughput further enhances this strategic positioning.
The hub model could prove particularly valuable as exploration activity increases across northern Queensland. Many smaller gold discoveries lack access to processing facilities, creating potential partnership opportunities similar to the GDM arrangement.
Financial Structure
The equal profit-sharing arrangement after cost recovery provides Native Mineral Resources with exposure to 51,100oz of contained gold without the typical mining risks or capital requirements. This creates an attractive risk-adjusted return profile, allowing NMR to benefit from gold price movements whilst GDM bears operational risks.
Moreover, the cost structure ensures that Native Mineral Resources receives compensation for plant utilisation regardless of gold prices, providing downside protection whilst maintaining upside participation.
Why Investors Should Track This Gold Processing Play
Native Mineral Resources has positioned itself as an innovative player in Queensland's gold sector by transforming from a traditional mining company into a strategic processing hub. The Yellow Jack joint venture validates this business model and could represent the first of multiple similar arrangements.
Key Investment Catalysts
Immediate Catalysts: Completion of due diligence and execution of definitive agreements will provide clarity on partnership terms and operational timelines. Successful completion should unlock immediate value as investors recognise the enhanced utilisation of NMR's processing assets.
Near-term Catalysts: Commencement of Yellow Jack ore processing will demonstrate the practical viability of the hub model. Initial production results will provide data on processing efficiency, recovery rates, and profit margins under the partnership structure.
Long-term Catalysts: Additional joint ventures utilising Blackjack capacity could multiply the value creation potential. As regional exploration identifies new deposits, NMR's established processing capability positions it as a preferred partner for toll processing arrangements.
The partnership with Great Divide Mining demonstrates NMR's ability to monetise its processing infrastructure whilst minimising operational risks. With gold prices remaining elevated and regional exploration activity increasing, the hub model could generate significant value as more projects seek processing solutions.
However, market conditions support this strategy, as smaller mining companies often lack the capital to build their own processing facilities. Native Mineral Resources' proven operational capability at Blackjack, combined with the successful partnership structure established with GDM, creates a template for future arrangements.
The joint venture also provides exposure to exploration upside at Yellow Jack, where drilling has only tested to 70m vertical depth. If additional resources are identified, NMR benefits from increased throughput without bearing exploration risks.
Native Mineral Resources has created an innovative business model that maximises asset utilisation whilst minimising capital risk. The Yellow Jack joint venture could be the first of several partnerships that establish Blackjack as the premier gold processing hub in the Charters Towers region, providing investors with leveraged exposure to regional gold production growth.
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