Micros with Majors: Prodigy riding shotgun on Newmont’s Tanami gold expansion

Newmont’s hunger for gold is driving exploration in the Tanami and Prodigy Gold is benefitting from two JVs with the mining giant.

Prodigy Gold is in two JV projects in the Tanami region with gold major Newmont. Pic: Getty Images

Micros with Majors is Stockhead’s column profiling and examining the stories behind micro-cap ASX companies in partnerships with some of Australia’s, and the world’s, leading organisations.

Newmont Corporation (ASX:NEM) is the world’s largest gold producing company and is keen to keep its crown – a goal that can only be met with continued expenditure on exploration and development.

Amongst the mines that contribute to its production, which hit 1.67 million ounces in the September 2024 quarter, is the Tanami underground operation in the remote Tanami Desert about 550km northwest of Alice Springs, Northern Territory, that has been operating since 2002.

Before its acquisition of Newcrest brought the Cadia and Lihir mines into Newmont's portfolio, Tanami produced 448,000oz of gold during 2023, making it the third largest mine in the company’s then portfolio behind Boddington in Western Australia and Ahafo in Ghana.

Further highlighting just how important the mine is to the company, it is currently undergoing the Tanami Expansion 2, which seeks to extend mine life to 2040 through the addition of a 1460m hoisting shaft and supporting infrastructure to achieve higher production and provide a platform for future growth.

This is expected to increase average annual gold production by about 150,000 to 200,000oz per year for the first five years and is expected to reduce operating costs by ~30%.

As of December 31, 2023, Tanami still held gold reserves of 4.8Moz with the company saying in its annual report that brownfields exploration and development for ore reserves was ongoing.

Tanami’s gold riches in focus

That’s not to say that Newmont isn’t carrying out greenfields exploration, far from it. That's where its relationships with junior neighbours really come to the fore.

The gold giant is conducting exploration activities on the Tobruk and Monza joint venture projects with Prodigy Gold (ASX:PRX) in the Tanami region.

The Tobruk JV was signed in May 2019, with Newmont sole funding exploration to potentially earn up to a 70% stake . At Monza, where a deal was signed in November 2021, it can earn 51% through funding exploration and can increase this to 70% through a decision to mine.

Speaking to Stockhead, PRX managing director Mark Edwards said Tanami was one of Newmont’s best projects and the gold major was looking to expand its operations.

“It is a pretty significant project for them and because of that, they are very active in exploration in and around that deposit,” he added.

This includes the two JV projects, which are in close proximity to the mine operations, as any significant discovery can be quickly developed using Newmont’s existing infrastructure.

Edwards also noted that Newmont had been quite active over the JVs over the past years.

“They use Deep Sensing Geochemistry – a proprietary geochemical technique that allows them to look under cover to try and identify potential mineralisation at depth – over a wide-spaced area and then close up the sample spacing when they find anomalies worth following up on,” he said.

“In the Tanami, the cover is not mineralised and it can hide potential gold mineralisation. To be able to look under that is very important towards understanding the potential for mineralisation at depth.

“They have also completed some geophysical techniques such as passive seismic, ground gravity and aeromagnetic surveys as well as some rock chip samples."

Newmont is also continuing operations over the JV projects with Edwards noting that one area they are focusing on is the Dune prospect, just south of the 2.7Moz Oberon deposit.

Drilling at Dune had defined significant gold anomalies over a 1.4km strike length after returning results such as 2m at 12g/t gold from 105m and 8m at 1.9g/t gold from 94m.

“Newmont is a big company that looks for projects of size and scale. That they are exploring on the JV projects highlights their obvious belief that they have the potential for that size and scale," Edwards said.

The Tobruk and Monza JV projects are located in close proximity to the 14Moz Callie mine. Pic: Prodigy Gold

A supportive partner

Edwards also has nothing but praise for Newmont, saying that they have taken a very collaborative approach and were as open as a company of their size could be.

“They have been very good for us, they don’t treat us like a junior partner, tell us what to do and walk over us,” he said.

“We have regular catchups with the Newmont team where we discuss the joint venture and they give us updates about where they are going.

“They have been very open to pass on their understanding and knowledge of what they see at their Oberon deposit and how it might relate to our deposits.”

Going for gold

Having Newmont as its partner also allows PRX to focus concurrently on its wholly-owned projects with the promising Hyperion deposit taking centre stage.

The 19.8km2 mining licence application covers Hyperion’s immediate strike and depth extensions, nearby prospects and space required for infrastructure.

Hyperion boasts an indicated and inferred resource of 8.6Mt at 1.5g/t gold for 407,000oz of gold, based on the assumption of an open pit mining operation which will form the basis of future studies.

“We are going to do some drilling at and around Hyperion, it will be a primary focus for us in the coming year,” Edwards said.

“We will look to make it as big as we can with the drilling we can do and then to also further advance near-field exploration prospects around that like Pandora and Brokenwood.”

PRX is also reviewing the Tanami West project and is considering its plans for the Old Pirate project, which Edwards said had a 100,000oz resource at more than 4g/t on an approved mineral lease.

At Stockhead we tell it like it is. While Prodigy Gold is a Stockhead advertiser, it did not sponsor this article.

Originally published as Micros with Majors: Prodigy riding shotgun on Newmont’s Tanami gold expansion