VSA Capital Market Movers – Tectonic Gold


VSA Morning Miner, 13/07/21

Tectonic Gold (AQSE:TTAU)

Tectonic Gold (AQSE:TTAU) has announced a new joint venture agreement on its Mount Cassidy license area in Queensland. The deal with White Prospecting will enable the JV partner to mine alluvial gold on this license area with 7.5% of gross royalties going to TTAU. The deal is designed to provide near term cashflow to TTAU without shareholder dilution which has been a key aim of management since the company was formed.

Given the scale of projects that TTAU is targeting being multi million ounce the volumes that are likely to be mined by this venture are likely to be insignificant to the wider potential. Furthermore, some of the work undertaken by the JV partner may well prove beneficial in terms of aiding the company’s understanding of local mineralisation. The focus will be on alluvial production from the historic riverbeds and paleochannels which has been eroded and transported from primary mineralisation. As yet, potential volumes are not yet clear but we see this as a potentially cash flow generative opportunity for little risk to TTAU shareholders.

We do note that a tightening of COVID related restrictions has delayed the team returning to site, however, we do not expect this to be a significant delay.

We reiterate our Speculative Buy recommendation.

Oliver O’Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: [email protected]

Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: [email protected]

VSA Capital Research | T: +44 (0)20 3005 5000 | E: [email protected]

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