PERTH (miningweekly.com) – Junior gold miner Unity Mining has inked an agreement to process gold and silver concentrate from its Dargues gold mine, in New South Wales, in a third-party processing facility.

The company this week announced that it had signed a binding heads of agreement with Westlime, which focuses on the production of high-quality fine lime, agricultural lime, dolomite, construction materials and roadbase from its Parkes facility.

The processing facility is a largely fit-for-purpose facility, which would be well suited for processing Dargues concentrate, Unit acting MD Frank Terranova said, and would require little upfront capital investment.

Under the terms of the agreement, Westlime would allow Unity to process up to 50 000 t/y of gold/silver concentrate for a minimum period of five years, starting in the third quarter of next year.

Unity has paid A$200 000 to have the exclusive option to process its concentrate at the Westlime processing facility, and would be required to pay Westlime an additional A$150 000 upon receipt of all final approvals for the Dargues project.

The arrangement was subject to Unity committing to a final investment decision on Dargues no later than the end of June.

Unity would be able to start plant modifications during the third quarter of 2016, and processing of the Dargues concentrate was expected to start by the third quarter of 2017.

“Delivering value accretive outcomes for shareholders remains a core focus of Unity. This is a further step in the advancement of the Dargues gold project, given Unity has recently determined that off-site processing of Dargues concentrate is preferred, thereby avoiding any cyanide processing on site,” said Terranova.

“In addition, we have recently completed a more thorough analysis of the project’s tailings storage facility requirements, which has determined that no modifications to the current facility is required, and we can revert to the current fully approved tailings plan as part of the development strategy for Dargues.”

The Dargues underground mine, according to a definitive feasibility study, is expected to deliver 50 000 oz/y of gold from the mining of 330 000 t/y of ore.