TORONTO (miningweekly.com) – Nevada project developer Veris Gold has secured a second toll-milling agreement for its Jerritt Canyon mill, in Elko County, Nevada.

The company on Tuesday said it had entered into a toll-milling agreement with Klondex Gold and Silver Mining, a subsidiary of TSX-listed Klondex Mines, to process ore from the Fire Creek project.

Under the terms of the agreement, Veris would accept delivery of nonrefractory gold ore produced from the Fire Creek project, located nearby in Lander County, to the Jerritt Canyon mill for processing for a fee of $148.50/t, which included trucking, and could be adjusted on a quarterly basis to reflect any changes to input costs.

The Klondex agreement included an additional upfront prepayment, to be deducted from future toll-milling charges, to assist Veris to refurbish the wet mill circuit at Jerritt Canyon.

Veris said the agreement was structured similarly to that it had recently entered into with Atna Resources, whereby all dore produced from the ore remains the property of Klondex throughout the process and the associated toll-milling fee charged would be treated as a credit to Jerritt Canyon operating costs.

“This second toll-milling agreement adds to our third-party ore processing revenue stream and provides an excellent additional source of ore as the Klondex team ramps up their mining operations into 2014.

“This agreement will further reduce our costs by making use of the excess capacity at the Jerritt Canyon mill when we begin processing the Fire Creek ore in the third quarter,” co-CEO and COO Randy Reichert said.

“I’m happy to report we continue to gain momentum to initial production via our bulk sampling programme at the Fire Creek gold project. Finalising this milling agreement is another major step forward for us, and we are extremely pleased to be working with the team at Veris Gold,” Fire Creek project GM Mike Doolin noted.

Klondex Mines CEO Paul Huet added that the excavation of the secondary egress, necessary to begin bulk sampling, is now 20% complete and is on track to be commissioned in mid-June.

“The agreement is facilitating Klondex to become Nevada’s next gold producer and puts cash flows from the Fire Creek project in 2013.”