PERTH (miningweekly.com) – Gold developer Phoenix Gold has signed a two-year milling agreement with FMR Investments for the Castle Hill project, in Western Australia.
Under the terms of the agreement, between 600 000 t/y and 800 000 t/y of ore would be processed at FMR’s Greenfields ore treatment facility, in Coolgardie, on a quarterly campaign basis, with no blending of any third-party ore.
The mill would be operated under the technical management of Phoenix, which will configure the circuit and set operational parameters to ensure optimal gold recovery at the lowest possible operating costs.
Phoenix reported on Monday that ore would be sourced from the shallow smaller-scale opencut mines, in close proximity to the mill, which have been optimised and designed in accordance with the staged development plan for Castle Hill.
The staged development of Castle Hill would see the establishment of a two-million-tonne-a-year processing plant, and a two-million-tonne-a-year heap leach plant to treat lower-grade ore. Over an eight-year mine life, Castle Hill is expected to produce about one-million ounces of gold, with production estimated at about 129 550 oz/y.
Payment for milling would be based on an open book cost-plus structure, and on a dollar-to-tonne basis.
“The signing of a long-term agreement with FMR is a great result for both parties and secures a milling pathway for ore mined under the base case development plan,” said Phoenix MD Jon Price.
He noted that the company had treated ore at the Greenfields mill with great success on a number of occasions over the past few years.