Great Western Mining Corporation PLC (AIM:GWMO) said it plans to create a joint venture (JV) to process gold and silver from waste material on its mineral concessions in Nevada, US.
The company’s shares jumped as much as 23% in London after it announced it had signed a memorandum of understanding with an experienced Nevada mining contractor.
Great Western and its proposed partner are negotiating a "fully-termed operating agreement", it said.
The JV will initially process material from Great Western’s Mineral Jackpot and Olympic Gold properties and material owned by the JV partner. The two companies will together source additional material from third parties for processing on a commercial basis.
Great Western said it has allocated up to US$100,000 to the JV to facilitate the detailed planning stage and submission to the Nevada Department of Environmental Protection.
The JV will process material using both gravity separation and a contained flotation system.
Most of the mine equipment identified by the JV will be pre-used, with refurbishment costs expected to be significantly lower than the cost of new equipment, and sourced locally, providing for economical start-up costs and a faster lead-time to commissioning, it said.
"At the end of 2020 we successfully produced a doré bar of gold and silver from spoil material at our Mineral Jackpot claims and established the potential for processing such material on a commercial scale,” said chairman Brian Hall.
“An initial low level gravity separation project was evaluated but this has since expanded as other material has been identified on our concessions, including significant tailings at the Olympic Gold Project.
“The ingredients are now in place to create a commercial plant to handle such material from all our concessions, where available, as well as processing material for third parties on a commercial basis.”
Great Western shares were up 16% at 0.15 pence by late morning, after touching 0.16p in earlier trading.