Laneway Resources Ltd (ASX:LNY) has signed an agreement with Maroon Gold Pty Ltd to undertake mining operations at Laneway’s Agate Creek Gold Project and process the ore through Maroon’s carbon-in-leach (CIL) processing plant.
The agreement entails Maroon mining and processing up to 100,000 tonnes of high-grade, near-surface ore from Agate Creek and meeting all operational costs including processing at its Black Jack plant near Charters Towers in QLD.
Commissioning works are being finalised at Black Jack which has the capacity to process up to 340,000 tonnes per annum.
‘Near-term generation of significant cashflow’
Laneway chairman Stephen Bizzell said: “This agreement represents a significant milestone for Laneway by providing the opportunity to mine and process ore from Agate Creek on a commercial scale.
“[The] minimal capital requirements [will enable] the near-term generation of significant cashflow for the company.”
Direct costs incurred will include: haul and access road construction and maintenance; waste dump preparation; support facilities; blast-hole drilling; sampling and assaying; mining and transportation of ore; crushing and milling; rehabilitation; and transportation of gold bars to the refinery.
Gold production above 3.5 g/t gold head grade will be paid 60% and 40% to Laneway and Maroon, respectively, with the initial 3.5 g/t produced to be retained by Maroon.
All royalty costs will be shared by both companies in proportion to their share of gold received.
Maroon will also provide an interest-free unsecured loan of $500,000 to Laneway to meet costs that will be incurred when completing the mining lease grant, including native title and landholder obligations, as well as tenement holding costs and environmental liability financial assurance requirements.
Design improvements at Black Jack
Laneway had previously processed a small metallurgical sample through a CIL plant at Georgetown and entered into a heads of agreement for the processing ore from Agate Creek.
This previous agreement was terminated and Laneway considers the new agreement with Maroon to provide a better commercial outcome and a more certain route towards beginning mining and processing operations.
The initial metallurgical sample of 5,472 dry metric tonnes produced 1,725 ounces of gold at a recovered gold grade of 9.8 g/t from a feed head grade of 11.2 g/t and recovery rate of 87%.
Circuit and reagent requirements highlighted by this test work has been incorporated into process design improvements during the recommissioning at Black Jack which now includes a Falcon concentrator and a Gekko intensive leach reactor.
Due to the design improvements, Laneway expects it will achieve recoveries of 90-95%.