PERTH (miningweekly.com) – The Lindsay’s gold project, in Western Australia, is a step closer to development after Aim-listed Keras Resources exercised an option to develop the mine.
ASX-listed KalNorth Gold Mines and Keras in March this year inked a heads of agreement to allow Keras an exclusive option to mine the current Joint Ore Reserves Committee-compliant resource at Lindsay’s through openpit and underground mining at the deposit known as Parrot Feathers.
The Lindsay’s mine incorporated a total resource of 215 000 oz of gold, of which 77% was classified as indicated. The high-grade Parrot Feathers deposit contained 54 000 oz of this gold.
Having exercised its openpit mining option, Keras would now have to prepare and submit an openpit mining proposal within four weeks, with the company proposing to start a 10 000 t bulk sample collection through the exploration trial decline at Parrot Feathers under a programme of works licence concurrent with the openpit operation.
The bulk sample was expected to provide grade and geotechnical data for an underground feasibility study, as well as test material for the optical sorting equipment.
Both Keras and KalNorth would now seek regulatory mining approvals and would finalise and execute a formal agreement prior to the start of mining operations.
KalNorth executive director Lijun Yang said on Tuesday that the start of openpit mining by Keras would enable KalNorth to receive cash flow with zero risk, under the current gold price environment.
Profit from Lindsay’s would be split on a 51:49 basis in KalNorth’s favour, after deducting royalties, operating costs and management fees for the Keras team, if the gold price was at A$1 600/oz or less.
At a gold price of A$1 600/oz or higher, the split would be 70:30 in favour of KalNorth.