Nativo Resources Plc (LSE:NTVO) told investors its joint venture with Boku Resources, for the Tesoro gold mine in southern Peru, has secured a sales agreement with a local gold ore processing plant.
The processing plant is some 70 kilometres from the mine.
Under the agreement, material from the mine will be processed at the plant, with recovered gold priced at the international spot price minus 20-30%. The processor anticipates a recovery rate of 90%.
"We are excited to have established a commercial arrangement with a local gold ore processing plant to sell Bonanza vein material,” chief executive Stephen Birrell said in a statement.
He added: “The mine is developing in line with expectations.
“Net income from vein material sales will initially be applied to expanding the mine and production at Tesoro through subsequent shafts and developing our own processing capabilities to retain more value from the mined material."
Boku Resources has been preparing for initial operations since September, accumulating 30 tonnes of vein material from development activities.
This stockpile, along with the first production material, will be transported to the processing plant in December 2024. According to Boku's sampling, the material is expected to yield grades of 8-10 grams per tonne of gold.
Simultaneously, mining operations at Blocks 1 and 2 will commence in December, targeting an initial production rate of 3-5 tonnes per day. Plans are in place to increase this to 28 tonnes per day by June with expanded mine development and the addition of a second shaft.
In London, the nano-cap share opened sharply higher and by 8:30am was up around 4% at 0.0027p – having traded as high as 0.0031 earlier. At current levels, the company has a market value of just £1.6 million.