The deal increases Tanami's interest in the Larranganni gold project from 48.5% to 92.5% with the right to acquire the remaining 7.5% upon completion of a bankable feasibility study. It also gives the company a 100% interest in a suite of other exploration projects.
Tanami will also acquire Glengarry's Tanami Province database, camp facilities and plant and equipment.
In return for the assets, Tanami Gold will pay $1.5 million in cash and issue 15 million shares to Glengarry.
Tanami Gold managing director, Denis Waddell, said the deal further consolidated the company's tenement holdings in a region that was one of Australia's last under-explored mineral provinces and host to the Granites, Callie and Tanami gold mines, as well as a number of recent promising discoveries including Coyote and Groundrush.
"Both Tanami and Glengarry agree the best way to realise the potential of the two group's interests in the region was for one company to take control of the tenements and eliminate the complex and restrictive agreements associated with the existing multiple joint venture structure," Waddell said
"Single ownership and management of the project areas will result in cost and operational efficiencies and attract added interest from investors and larger mining companies, the benefits of which will flow through to both Tanami Gold and Glengarry.
"Glengarry will retain an interest in the future of the projects through its shareholding in Tanami Gold, and retains a free carried 7.5% interest in the Larranganni gold project up to completion of a bankable feasibility study".
Tanami plans to complete as soon as possible a previously planned testing at depth of the Sandpiper resource within the Larranganni project area. Previous drilling returned a 59m intersection starting at a depth of 170m and grading 5.5gpt gold.
Glengarry chairman, Allan Harris, said: "The deal gives Glengarry the flexibility to follow other opportunities it has identified while retaining a substantial interest in the future of the Tanami projects".
"The Tanami joint ventures with Tanami Gold have required disproportionate expenditure commitments by Glengarry which has retarded the progress of other important projects in the company's portfolio and restricted our ability to pursue opportunities to acquire other projects and exploration properties.
"The proceeds from this transaction will underwrite the future planning and
exploration activities of Glengarry at a time when equity capital is difficult to raise on reasonable terms."
Upon completion of the deal, which is subject to the approval of Tanami Gold's shareholders, Tanami will have a 100% interest in the Balwina, Oasis, Supplejack, Afghan, Bloodwood and SW Pargee joint venture tenements.
Waddell said Tanami Gold has been actively managing its portfolio of assets in the Tanami region resulting in a number of recent deals.
In late June the company acquired Precious Metals Australia’s remaining 16% interest in the Oasis joint venture and in April one of the world's largest gold miners, South African-based Gold Fields Limited, became a partner in the company's Solitaire project on the Northern Territory side of the Tanami-Arunta Province where a significant drill program is due to start.
