Elemental acquired a 5% NPI or A$10/oz royalty on the Mount Pleasant operations in Dec 2017. In 2019, Mount Pleasant provided US$0.05m in gross royalty revenue to Elemental.
The Mount Pleasant operations are located 40km northwest of Kalgoorlie in Western Australia, and 10km from the Paddington Mill operated by Zijin Mining Group (HKSE: 2899). Mount Pleasant was acquired by Zijin 2012 through the acquisition of Gold Fields Limited, one of Australia’s largest domestic gold producers. Mount Pleasant is a typical Eastern Goldfields Archaean greenstone-hosted lode gold mine with historic production estimated at 4MOz Au. The royalty dates back to 1993 and encompasses 28 individual mining licences, 15 of which have defined Resources, many with earlier production.
Mount Pleasant is currently providing small parcels of higher grade underground or soft oxide ore swing production. As a small part of a large, multi-source operation for a private company with limited public information available it is difficult to forecast royalty revenue until the next major new project is started. The projects under active consideration by the operator, Tuart Underground (476kOz @ 6.0g/t) and Racetrack (814kOz @ 2.3g/t), are expected to each produce 25-30kOzpa or more.
We believe that the historical production, current endowment including higher grade Resources, and the extent of structural disruption of archetypal host rocks of the region will continue to generate attractive targets and ongoing production.