4th Dec 2015 08:39
LONDON (Alliance News) - Ferrex PLC Thursday said it has started initial work in Western Australia as part of its agreement with Norton Gold Fields Ltd and said first production is on track to start before the middle of 2016.
Ferrex shares were up 7.5% to 0.430 pence per share on Friday morning.
Ferrex has a five year tribute agreement with Norton Gold Fields, a subsidiary of the Chinese state-owned Zijin Mining Group Co Ltd, whereby Ferrex will mine gold deposits in Australia owned by Norton.
Initial fieldwork has now commenced, with first production still anticipated to be in the second quarter of 2016. The production will be significant, with initial production to vary between 20,000 and 30,000 ounces of gold per year.
Ferrex is currently reviewing the existing drill holes on the deposit areas by conducting a detailed land survey which will be used to finalise an initial "high priority", in-pit grade control drill programme before the end of 2015.
Ferrex is able to reach production quickly from the project by initially targeting shallow deposits to generate near term revenues. The shallow deposits already have mined pits from previous operations and Ferrex will be focused on the remnant economic material below the pit floor, near surface deposits that have not been previously mined and "other high grade underground opportunities," it said.
Existing drill holes and mining operations on the areas have historical resources of 5.7 million tonnes of ore at a grade of 2.0 grammes of gold per tonne - equal to 363,599 ounces of gold.
Ferrex signed the agreement to mine Norton's gold fields to get near term cashflow through the door so it can develop its Nayega project in Togo where the miner aims to produce around 250,000 tonnes of manganese concentrate per year.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
FRX.L