Blackham Resources Ltd (ASX:BLK) has signed an agreement with GWR Group Ltd (ASX:GWR) covering that company’s 254,000-ounce Wiluna West Gold Project.
The agreement is for the exploration, development, mining and processing of gold resources from the project, which is 40 kilometres by road from Blackham’s Wiluna treatment plant.
It provides Blackham with access to additional free milling inventory for the operating plant at the Wiluna-Matilda Gold Operation.
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Blackham’s managing director Bryan Dixon said: “This GWR agreement represents an opportunity to partner with an emerging junior in the Wiluna district for the benefit of both parties.
“It is consistent with Blackham’s strategy of strengthening and lengthening its free milling reserves within trucking distance of its Wiluna gold plant.
“The agreement applies to 25-kilometres of prospective strike of free milling mineralisation with existing resources that has had limited drilling over the past 15 years.”
The Wiluna West Gold Project is 40 kilometres west of the Wiluna plant by road.
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This binding heads of agreement provides for the establishment of a mineral processing joint venture (JV) which will see Blackham with a 65% share of profits and GWR with 35%.
The JV agreement is planned to be executed next month and will define the terms outlined in the heads of agreement.
GWR responsible for drilling and test work
Under these terms, GWR will be responsible for drilling the separate gold deposits to JORC 2012-compliant level with a minimum indicated category at their cost.
GWR will also be responsible for initial metallurgical test work and approvals associated with the deposits.
Blackham will manage JV
Blackham will be responsible for feasibility studies to determine the economic potential of the deposits.
Upon completion of a positive feasibility study, Blackham can elect to schedule the start of mining and processing of the reserves, which includes transportation.
Blackham will manage the JV, which includes the pre-development/mine set-up, mining operations and processing the gold ore from Wiluna West through the Wiluna plant.
Once mining starts all costs will be shared in proportion to the JV ownership with the bullion produced shared under the same ratio.
Potential mid-2019 start
Initial focus at Wiluna West will be on the Golden Monarch and Eagle/Emu deposits with approval processes well advanced and mining potentially beginning in mid-2019.
GWR has recently completed additional resource definition drilling and is undertaking the necessary ancillary studies to facilitate approvals.
Blackham’s Wiluna-Matilda operation is in Australia’s largest gold belt which stretches from Norseman through Kalgoorlie to Wiluna.
The operation now includes resources of 96 million tonnes at 2.2 g/t for 6.7 million ounces, all within 20-kilometres of the central processing facility.
READ: Blackham Resources boosts gold reserves by 27%
Ore reserves were recently boosted by 27% to 26 million tonnes at 1.8 g/t gold for 1.53 million ounces with further conversion of resource into reserves expected.
Free milling reserves now total 550,000 ounces, an increase of 190% on 2017.
Blackham has consolidated the entire Wiluna Goldfield within a more than 1,440 square kilometre tenure package which has historically produced in excess of 4.4 million ounces over a 120-year mining history.