PERTH (miningweekly.com) – Metals developer Malachite Resources on Thursday told shareholders that it was weighing its options on the Lorena gold project, in Queensland, after joint venture (JV) partner BCD Resources called in administrators.

BCD suspended share trading earlier this month as the company attempted to finalise project capital and commissioning funding required for the Lorena JV.

Malachite followed suit, placing shares in a trading halt after BCD requested that the JV agreement be restructured and that Malachite offer some or all of its 100% interest in the mining licence covering the Lorena project as security to assist in the raising of additional funding, which it may need to meet its earn-in obligations.

In announcing the appointment of administrators, BCD said on Thursday that the administrators were acting on behalf of MKS Precious Metals, with whom BCD had a A$3-million facility.

However, the miner noted that it would continue in its negotiations with Malachite around acquiring the necessary funding for the Lorena project.

Meanwhile, Malachite told its own shareholders on Thursday that it was reviewing its options on the Lorena project, in light of BCD going into administration, with the company adding that it would investigate its own funding requirements and options to develop Lorena.

Under the original JV, BCD has not yet earned its 50% interest in the project, as it had not met its obligations to fund project development through to the completion of construction and the commissioning of a plant to produce a gold concentrate.

Malachite believed that the project remained robust, with key parameters improving since the initial feasibility study work, including a stronger Australian dollar gold price and lower diesel prices.

The Lorena project was expected to produce about 30 000 oz of gold in its first year of operation from an openpit mine, with the project offering potential to extend the resource at depth.

A flotation production facility at Lorena, which could process about 120 000 t/y of ore, was currently under construction. However, a number of key items were yet to be completed before commissioning could start, and Malachite said that commissioning of the plant was now unlikely to start until at least March, subject to BCD obtaining sufficient financing.