PERTH (miningweekly.com) – ASX-listed Matsa Resources has inked a memorandum of understanding (MoU) with Pit N Portal Mining Services (PNP) to investigate the restart of the Red October gold mine, in Western Australia.
Matsa in September last year agreed to acquire the Red October project from fellow listed Saracen Mineral Holdings for A$1-million in cash and 4.545-million in shares.
Matsa told shareholders on Friday that the two-stage MoU was for underground studies that would determine the potential to restart mining at the project. Stage 1 would encompass high-level economic investigations, that would be completed in April this year, while Stage 2 would consist of detailed work, including mine designs and schedules, to determine the potential to restart mining operations.
PNP has agreed to provide the Stage 1 services at no cost to Matsa.
Subject to the study proving a positive economic return, Matsa would then take a decision on whether to resume mining at Red October. At this point, a formal mining contract would be entered into with PNP.
“PNP have a vast amount of experience and knowledge of Red October, having been the previous mining contractor at the mine,” said Matsa executive chairperson Paul Poli.
The Red October mine has an historical production of 342 000 oz gold at an average grade of 6.1 g/t, and includes 64 km2 of granted mining tenements and a Joint Ore Reserves Committee-compliant resource of 99 000 oz.