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NEWGENGOLD PREVIEW

First encounter with

a spin-out

by Michael Washbourne

ewcrest Mining Ltd’s decision to exit the Tanami region earlier Hamelin is unlikely to deploy any major exploration crews to the
Nthis year has opened the door for Encounter Resources Ltd Tanami until March next year, although the company is keen to
to undertake the first spin-out of its 15-year history. complete a detailed aeromagnetic survey over its 2,277sq km
Subject to shareholder approval, Encounter will demerge and ground package in November. A series of R&D-based exercises
launch an IPO of its wholly-owned subsidiary Hamelin Gold Ltd, to establish better ways to look through the sand cover is already
which is poised to list on the ASX in early November after raising under way.
$10-12 million. Bewick likened the exploration opportunity in front of Hamelin in
The IPO of Hamelin will include a pro-rata priority offer to eligible the Tanami to what Encounter has been pursuing in the Paterson
Encounter shareholders of up to 25 million shares in the spin-out. province for over a decade.
Euroz Hartleys Ltd will act as lead manager of the process, with “Tanami is in that same stage the Paterson was 10 years ago,”
Chieftain Securities Pty Ltd appointed co-manager. he said.
Founding Encounter directors Will Robinson and Peter Bewick “The basic concept here is you’ve got an absolute giant, obviously
will respectively assume the chairman and managing director Telfer in the Paterson and Callie in the Tanami…but the fact you
roles at Hamelin, with former Gold Road Resources Ltd director have one of these absolute giants in an orogenic gold belt and
Justin Osborne and industry veteran Philip Crutchfield also don’t have another couple of 5 moz, a couple of 3 moz and a big
joining the board in a non-executive capacity. long tail of 500,000oz to 1 moz deposits…it’s just absurd to say
Bewick said Newcrest’s decision to walk away from the JV with there is only one plus-1 moz deposit in the field.
Encounter in the West Tanami to focus on other interests had “If we can get a good war chest together, we’ve got multiple
been the catalyst for the demerger. opportunities and projects in various stages and really good gold
“When Newcrest moved their focus into Havieron and obviously occurrences spread over that 100 strike kilometres we hold. It’s
the Red Chris operations in Canada, the project came back to almost a dream position to have…it’s actually quite an advanced
us and we had this sort of crossroads moment where we were but still very greenfields project, given there’s no resources
asking ourselves what was the best path for this asset,” Bewick defined as of yet.”
told GMJ. Hamelin also has an EIS co-funded diamond drilling grant which
“Over 15-odd years in Encounter, we’ve typically gone down the the company will look to exercise by mid-next year.
path of a JV, whether that was with Antofagasta plc, Newcrest, For Bewick, Hamelin will be his first time taking the lead role
IGO [Ltd] and now BHP [Ltd] in the Northern Territory. We’ve within a company and he could not be more excited about the
never really been a spin-out company, so this is the first time challenge.
we’ve really even considered it strongly. “I’ve been reasonably heavily involved in the commercial side
“We think this is the right project, at the right time and exactly in the of things [at Encounter], but it’s the ultimate test really, to have
right part of the world. It’s a great gold asset, it’s entirely focused your own show and run the company, direct it the way you want
within Western Australia and is on fully granted exploration to go, look at the opportunities and assess what’s best for your
licenses that are very young – the oldest is only three years – shareholders,” he said.
and the benefit of being in partnership with Newcrest is we inherit “Exploring orogenic gold belts is where I basically started and it
everything they invested in the project, which was about $4.3 can be quite a challenging field, but it’s going to be good fun and
million, for nothing.” that’s why both Ozzy [Osborne] and I are doing this because we
Key works completed by Newcrest under the JV include land think it’s not only going to be a great challenge, but also great fun.
access negotiations, a major airborne magnetic survey and other We get to build the team we want and target the people we think
large heritage surveys. are the ideal fit for this new company.”

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