Dampier and Vango team up on K2 mine development
PERTH (miningweekly.com) – ASX-listed Dampier Gold and fellow listed Vango Mining have inked a farm-in agreement over the K2 mine development, in Western Australia.
In January last year, Vango took full ownership of the greater Plutonic Gold project, which includes the K2 project, after a A$6.2-million deal with Dampier.
Under the terms of the agreement, Dampier will contribute the lesser of 50% of the capital expenditure (capex), or A$3-million to the development, exploration and gold mining at the K2 deposit.
The funds will be provided in tranches approved by the joint venture, with Dampier earning an interest in K2 equal to the lesser of its funding as a percentage of the capex, or 50% within the two-year period from the start of the agreement.
Vango executive chairperson Bruce McInnes said on Tuesday that the agreement with Dampier provided a clear pathway for the funding and development of the K2 asset into production, and represented a significant point in the evolution of the Plutonic Dome project, in line with the company’s goal to develop a substantial gold mining operation.
“The updated definitive feasibility study released earlier this year reaffirmed the economic robustness of the K2 deposit. The funding to be provided by Dampier under the term sheet significantly reduces the already low capital cost requirements of K2 and helps pave the way for the commencement of mining activities,” McInnes said.
Vango in March started dewatering activities at the K2 deposit.
Meanwhile, Dampier chairperson Malcolm Carson said the company was confident shareholders would benefit from the participation in the development of the K2 deposit, and the returns it would bring in the form of gold sales revenue.
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