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Encounter Joins Forces with Newcrest for Project Generation

Wally Graham - Resources Roadhouse - 20-Sep-2017

Encounter Resources (ASX: ENR) reminded the market of its exploration abilities by entering a project generation alliance with Newcrest Mining (ASX: NCM). 

Encounter Resources announced the deal with the Australia-based gold and copper major in July. 

The deal will result in Newcrest providing funding up to $500,000 over the next 12 months to Encounter with the aim of generating new generate project opportunities within an agreed alliance area in Western Australia. 

The alliance is an acknowledgement of the expertise of Encounter’s highly credentialed project generation team, which has been charged with the responsibility to identify new camp scale exploration and potential future production opportunities in northern WA. 

Encounter will be the manager of project generation within the designated alliance area, from where it will submit projects for potential Joint Venture approval. 


The alliance area excludes any ground that Newcrest or Encounter currently have a direct or indirect interest in, or is under application by Newcrest or Encounter. 

It also contains an exclusion zone that specifically excludes projects around Newcrest’s Telfer mine in the Paterson Province of WA. 

Under the terms of the agreement the two companies will enter into a 50:50 joint venture over any project deemed worthy of further exploration. 

Encounter will have the option to maintain its 50 per cent contributing interest in approved projects by co-funding its share of exploration expenditure. 

Should Encounter elect not to contribute on a 50:50 basis, Newcrest may increase its interest to 80 per cent by sole funding further exploration activities and delivering a JORC compliant resource of greater than one million ounces of gold or gold equivalent. 

If Newcrest chooses not to do this, then any JV over the identified project will terminate and Newcrest’s interest will revert back to Encounter, which will then hold a 100 per cent interest in the project. 

If both parties agree not to proceed with a proposed project, it will revert to Encounter on a 100 per cent basis. 

“We are delighted to be working on new project generation with Newcrest which has a unique understanding of the district potential of northern Western Australia,” Encounter Resources managing director Will Robinson said. 

“The alliance structure provides Encounter with significant leverage and resources to generate and advance a pipeline of projects with the potential to host plus one million ounce gold deposits in northern Western Australia.” 

As good as the deal is, Encounter hasn’t taken its eyes off the prize at the company’s Telfer West gold project. 

Recent RC drilling to follow up the gold intersections made to the Northern Magnetic Anomaly and to test for extensions along strike at the Egg prospect at Telfer West intersected primary end of hole gold stock-work mineralisation. 

Drilling at the Egg prospect included two RC drill holes (ETG0067 and ETG0068) drilled 800m south-east and along strike of ETG0002, which in December 2016 intersected a zone of stock-work style gold mineralisation that included: 

38.6m at 1 gram per tonne gold from 333m, including 4.2m at 3.2g/t gold from 333.5m; and 

36m at 0.6g/t gold from 396m, including 3.2m at 3.3g/t gold from 415.2m. 

ETG0067 returned: 

122m at 0.2g/t gold with gold mineralisation strengthening towards the bottom of hole (36m at 0.4g/t gold from 124m to EOH). 

This hole will be extended with a diamond tail in August 2017. 

Assay results from ETG0068 are expected in August, along with results from diamond hole ETG0007, drilled north-west and along strike of ETG0002. 

The RC program also included drilling at the Northern Magnetic Anomaly where earlier drilling designed to test for continuity of gold mineralisation and for additional gold mineralisation to the south-east intersected high-grade, near surface gold mineralisation  

The drilling intersected additional supergene gold mineralisation but of lower tenor than previous results with intersections of: 

ETG0026 

14m at 0.4g/t gold from 62m, including 2m at 2.1g/t gold from 62m; 

ETG0030 

6m at 1.4g/t gold from 88m; and 

ETG0031 

6m at 0.4g/t gold from 196m to EOH, including 2m at 1.1g/t gold from 200m to EOH. 

“This first batch of assay results has confirmed the significant strike extent of the gold stock-work mineral system discovered at Egg,” Robinson said. 

“The assay results from ETG0067 warrant immediate follow up with a diamond drill rig.” 

 

Encounter Resources Limited (ASX: ENR) 

...The Short Story 

 

HEAD OFFICE 

Level 7 

600 Murray Street 

West Perth WA 6000 

Ph: +61 (8) 9486 9455 

Email: contact@enrl.com.au 

Website: www.enrl.com.au 

 

DIRECTORS 

Paul Chapman, Will Robinson, Peter Bewick, Dr Jon Hronsky  


Wally Graham

www.resourcesroadhouse.com.au
Email: wally@resourcesroadhouse.com.au
Mobile: 0410 788 304
Address: PO Box 1272, SUBIACO WA 6904