BMG Resources (ASX: BMG) has signed a toll treatment agreement with Wiluna Mining to facilitate the processing of ore from BMG’s fledgling Abercromby gold project in Western Australia.
The agreement will allow for near-surface ore from an Abercromby open pit operation to be treated at Wiluna’s established Matilda processing plant, 20 kilometres to the north-east.
The conventional carbon-in-leach (CIL) facility — which currently processes its own ore and third-party ore from various sources — should provide a favourable processing solution to underpin a scoping study for mine development at Abercromby.
BMG will deliver ore to the Matilda run-of-mine pad and retain title to the ore during the process, while Wiluna will be responsible for crushing, processing and delivery to a nominated refinery.
The two will determine toll treatment fees by reference to a fixed rate per tonne, adjusted in accordance with the prevailing gold price and characteristics of the ore.
BMG is continuing its scoping study work by with a view to assessing the optimal low-capex, high-margin scenario for a potential mining operation at Abercromby.
BMG non-executive chair John Prineas said the agreement was a step forward in the company’s transition from gold developer to producer.
“Gold prices are at record highs and we are excited to accelerate feasibility studies for a mining operation at Abercromby which could quickly deliver very significant value for our shareholders,” he said.
“With a large open pit resource located on a granted mining lease, established regional infrastructure and now a clear gold milling solution, Abercromby offers us potential for a low-capex, fast-tracked development.”
Located in the world-class Agnew-Wiluna Greenstone Belt, Abercromby has a maiden mineral resource estimate of 11.12 million tonnes grading 1.45 grams per tonne gold for 518,000oz across two granted mining leases.
The resource commences from near-surface and is open at depth, allowing potential development as an open-pit operation which transitions to underground mining.
Abercromby’s Capital deposit has two broad resource zones of 354,000oz gold at 1.17g/t (0.4g/t cut-off from surface to 200m depth); and 164,000oz gold at 3.09g/t (1.25g/t cut-off between 200m and 500m depth).
BMG believes the high-grade gold zones within the global resource — including 935,000t of gold at 5.06g/t for 150,000oz — present an opportunity for a strategic and phased approach to potential mine development.
Metallurgical studies have confirmed free milling gold across the project, with CIL recoveries in the range of 93% to 95%.
Mr Prineas said the strong gold price environment supported a commercial strategy to advance Abercromby to a near-term development.
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