AuKing Mining Ltd has signed a three-way memorandum of understanding (MoU) with Orion Resources Pty Ltd and Tick Hill Mining Pty Ltd, agreeing to investigate the viability of processing tailings and other ore from the Tick Hill Mine area at the Lorena processing plant, as well as potential refurbishment options.
The company has also welcomed a move by Orion Resources to raise $2 million in a private convertible note raising with GBA Capital to support the acquisition of the Cloncurry Project, in which AuKing intends to earn a 15% interest by the end of the year.
AuKing is not offering any securities or other interests in relation to the raising.
Strong synergies with Lorena facility
AuKing Mining managing director Paul Williams said the new MoU was an exciting development as an option to be considered to create an early pathway for the re-commencement of gold production at the Lorena processing plant near Cloncurry.
“In addition, the private GBA Capital raising provides Orion Resources with important funding for its acquisition and also enables project development studies (including those planned for Tick Hill) to commence.
“The 'hub and spoke' business model that is based on a centralised Lorena processing facility for a range of copper and gold projects in the Cloncurry region is already gaining significant momentum,” Williams said.
A pre-feasibility study (PFS) completed on the Tick Hill Project outlined a processing capacity of 474,200 tonnes at 2.0 g/t gold over 13 months for about 27,300 ounces of gold at an all-in sustaining cost (ASIC) of A$1,493 per ounce.
The PFS describes an economically viable open pit mine and tailing re-processing gold project at an assumed gold price of $2,300 per ounce.
The project’s probable ore reserve includes:
- Open pit - 10,200 ounces of gold;
- Tailings and ROM stockpiles - 17,800 ounces;
- Total ore reserve - 28,000 ounces.
Tick Hill mine MoU
The MoU involves a collaboration between the three companies to enable the following:
- Conduct a study to assess the viability of processing the tailings and other ore materials from the Tick Hill mine area at the Lorena processing plant (with a focus on process flow, metallurgy, capital and operating costs);
- Assess the extent of refurbishment and construction modifications required at Lorena to support Tick Hill processing;
- Upon confirmation of positive economics, commence plant refurbishment and construction; and
- Finalise commercial parameters for the processing of the Tick Hill materials.
Orion intends to use the funding from its capital raise to:
- Prepare studies and resource updates;
- Complete drilling, sampling, assaying and metallurgical work to support studies;
- Establish a costed pathway to a maiden reserve at Mt Freda;
- Support legal and tenement holding costs associated with the proposed acquisition; and
- Service general working capital.