Sign up Australia
Proactive Investors - Run By Investors For Investors

Coolgardie Minerals signs ore sale agreement for Geko Gold Mine in WA

The agreement with Northern Star Resources is for the sale of the first 100,000 ounces of oxide ore produced at Geko Gold Mine in the Goldfields.
Coolgardie Minerals signs ore sale agreement for Geko Gold Mine in WA
Geko is 25 kilometres northwest of Coolgardie in Western Australia

Coolgardie Minerals Ltd (ASX:CM1) has entered into an ore sale agreement for oxide ore produced at its Geko Gold Mine near Coolgardie in Western Australia.

The agreement is with gold major Northern Star Resources Ltd (ASX:NST), who will buy the first 100,000 tonnes of ore produced at a fixed gold price of $1,650 per ounce.

The ore will be supplied at a minimum grade of 2.75 g/t and will be delivered in parcels of 10,000-25,000 tonnes over a six-month period starting October 1, 2018.

First ore is planned from the Geko pit this October in line with the agreement.

‘Locking in consistent revenue’

Coolgardie managing director Bradd Granville said the agreement was a significant milestone for the company.

He said: “This agreement [is] transitioning us from developer to producer and locking in consistent revenue through to quarter 2, 2019.

Purchase agreements for each parcel of ore will be established with Northern Star after sampling procedures are completed and the grade has been confirmed and agreed.

Coolgardie expects the sale agreement to generate more than $10 million in revenue throughout its duration.

Agreement in line with Northern Star regional hub strategy

Northern Star chief executive officer Stuart Tonkin said the agreement was an opportunity to partner with an emerging junior in the Coolgardie area.

Tonkin said: “[The agreement] is consistent with our regional hub strategy following our acquisition of the South Kalgoorlie Operations earlier this year.”

Net smelter royalty

Bulletin Resources Ltd (ASX:BNR), which is entitled through its wholly-owned subsidiary Gekogold Pty Ltd to a net smelter royalty, announced yesterday that based on the ore production schedule it expected to receive royalty income from early 2019.

This would be payable in cash, comprising:

  • 10% of the first 25,000 ounces of gold produced;

  • 4% of the next 60,039 ounces produced; and

  • 2% of all production above 85,039 ounces.

Additional toll milling on the cards

The Geko Gold Mine has a mineral reserve of 1.578 million tonnes of ore at an average grade of 1.8 g/t gold.

Other toll-milling options are being negotiated with nearby gold mills for the treatment of Geko’s remaining ore.

The clay content and higher-grade nature of the supergene oxide component of the Geko deposit makes the ore suitable for blending with fresh underground ore.

View full CM1 profile View Profile

Coolgardie Minerals Ltd Timeline

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use