Astro Resources pauses East Kimberley works, diverts funding to US gold asset

Astro Resources N.L. (ASX:ARO) has pressed pause on its East Kimberley Diamond Program of Works (POW) after it experienced delays reaching an agreement with Traditional Landowners. Specifically, Astro is yet to finalise a treaty with Traditional Owners of the Lower Smoke Creek site, which is necessary for the POW to proceed. The ASX-lister says delays were caused by travel restrictions brought on by the COVID-19 pandemic, which have made it difficult to regularly travel to Kununurra and reach an agreement. While it progresses negotiations, Astro will divert funds it raised earlier this year to advance exploration at its Needles Gold Project in the US. “A minor setback” Astro Resources chairman Jacob Khouri addressed the pause in activity in an ASX announcement on Friday. He said: “We see this pause in the East Kimberley Diamond Program of Works as a minor setback to our exploration plans. “We will continue our dialogue with the Traditional Owners of the Lower Smoke Creeks site while we progress our Needles Gold and Governor Broome HMS projects. “We remain firmly committed to continuing our work at the Kimberley Diamond Project and will update the market as we progress securing the necessary POW.” Negotiations continue Astro needs to reach an agreement with the Lower Smoke Creek’s Traditional Owners to carry out field work at the Kimberley Diamond Project. Originally, the company received an agreement from the Traditional Owners that, subject to a minor change, aligned with their deal. Since that date, however, Astro has received a counter-proposal that triggered further negotiations. While the explorer admitted the delays are unfortunate, it maintained it is dedicated to continuing exploration in the Kimberley. To facilitate this, mining consultant SRK has come onboard and will help the company apply for an extension to its exploration licence so it can progress works beyond August 2021. Extra financial support at US gold play As negotiations progress, Astro is determined to ensure its capital is being put to use. Therefore, the company has elected to divert the money it received during a February capital raise to its Needles Gold Project. In late May, Astro announced data modelling over the Needles asset had confirmed the presence of a large chargeability anomaly. Following this discovery, the company planned a diamond drilling campaign involving three, 500-metre-deep holes and one additional hole targeting mineralisation beneath the project’s Tomahawk shaft. As a result, the funding diversion will provide extra financial support as Astro expedites work at the US gold play. Astro chairman Jacob Khouri said: “The confirmation of the significant chargeability anomaly within the Needles Property, which is believed to reflect the presence of significant disseminated pyrite and possible gold mineralisation, is highly encouraging. “As a result, the Astro board has escalated the proposed work program with the aim of confirming the high prospectivity of the Needles Project as quickly as possible. “The decision to undertake a four-hole campaign reflects the board’s confidence in the Needles Project.”