The Koonenberry project is located 160 kilometers northeast of Broken Hill and hosts widespread gold occurrences in eluvial and alluvial surface materials, coherent gold geochemical anomalies, and exposures of gold in bedrock. The Company completed a restructuring of the Koonenberry property package in 2013. As a result, all joint venture agreements were renegotiated, leaving EMX with 100% control of the most prospective licenses, and royalty agreements covering less prospective ground. Subsequently, the Company signed an Exploration and Option Agreement with North Queensland Mining Pty Ltd. ("NQM"), a privately-held Australian company, to earn a 100% interest in the EMX licenses, with EMX retaining a 3% production royalty (see EMX news release dated February 19, 2014 for more information).
EMX acquired its initial position in Koonenberry after recognizing the potential for undiscovered bedrock gold sources in an area known for its specimen gold. Many of Koonenberry's geological features are remarkably similar to the orogenic deposits of the Victorian Goldfields, also located in southeastern Australia. The project is positioned along the northwest trending Koonenberry fault, which is a major terrane boundary in southeastern Australia. Although there are no records of previous hardrock mining at Koonenberry, much of the gold recovered through surface prospecting occurs as coarse specimens with attached "reef" quartz, suggesting a nearby primary source.
Initially, NQM anticipates commencing small-scale gold production from the alluvial and eluvial materials, while continuing to explore for the bedrock sources of gold mineralization. EMX views NQM's proposed production scenario as a way to quickly capitalize on the demonstrated alluvial/eluvial gold potential, while providing revenue streams to support further exploration and project development.