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Intermin Resources Ltd in gold ore treatment deal with Norton Gold Fields

Published: 10:00 27 Jul 2016 AEST

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Intermin Resources Ltd (ASX:IRC) is on the road to gold production, after executing a binding letter agreement for ore treatment with Paddington Gold Pty Ltd, a wholly-owned subsidiary of Norton Gold Fields Ltd.

The deal enables an accelerated mining schedule at a reduced capital cost for Teal Stage 1, which is located 12 kilometres from Kalgoorlie-Boulder in the goldfields of Western Australia.

The ore will be delivered by Norton’s haulage contractor at cost using their existing private haul road 2 kilometres to Teal’s east.

This avoids the building of a rail crossing and highway intersection that would be required to deliver ore to the other mills.

Capex savings will be circa $750,000, and with lower haulage costs, this improves the overall project economics.

Jon Price, managing director for Intermin, commented:

“This agreement with Norton secures ore treatment for Teal at a reduced capital cost by using existing off highway road networks and very competitive terms.

“This marks the final key milestone for the development of Teal and we look forward to moving the mine into production after final board approval this quarter."


Analysis

Payment by Norton will occur in two parts, an upfront payment for 50% of gross revenue payable on 80% of the mine predicted grade.

The final payment will be within 4-5 weeks after assay determination, recovery work and costs reconciled.

This deal is very competitive and allows earlier gold production at attractive unit rates.

The timing is right for Intermin, as the Australian Dollar gold price traces at circa A$1750 an ounce.

 

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