7th Jul 2016 11:11
LONDON (Alliance News) - Keras Resources PLC on Thursday said it has finished mining two projects located within the Grants Patch gold tribute lease area, and the mining fleet is now moving to the nearby Wycheproof project, which is a higher-grade asset.
Keras has a five-year agreement in place that allows it to mine certain gold deposits in Australia owned by Norton Gold Fields, with the London-listed miner extracting ore to be processed at Norton's nearby Paddington processing plant.
Keras pays a 22% royalty on the gold recovered from those areas to Norton Gold Fields.
There are numerous deposits included in the deal, but Keras on Thursday said it has now completed mining operations at the Anomaly 22 and Accord projects that lie within the Grants Patch gold tribute lease area.
The mining fleet is moving to the nearby higher-grade Wycheproof project, where open pit mining will start "shortly".
Wycheproof is near Grants Patch but will be mined under a separate agreement with Kalgoorie Mining Associates. However, Norton Gold Fields has the first refusal to treat the ore extracted by Keras from Wycheproof at the Paddington processing plant.
Keras splits all the profits equally with Kalgoorie under that agreement and Norton is paid a 2% royalty.
"The completion of mining at Anomaly 22 and Accord is a significant milestone in our mining history. In addition to cash flow generated, the open pit operations have also allowed us to fine tune the logistics associated with tribute mining and toll processing ahead of moving into the higher-grade Wycheproof deposit located close to Grants Patch," said Keras Managing Director Dave Reeves.
A more detailed quarterly production report on the gold operations will be issued once all costs and production estimates are reconciled.
The miner said it also expects to secure permits for two other projects shortly, the Prince of Wales and Lindsay's projects, which should allow work to begin in the third quarter of this year.
The Prince of Wales project is covered by the Grants Patch agreement with Norton Gold Fields whilst Lindsay's project will be mined under another separate deal with KalNorth Gold Mines Ltd, which receives a share of the net revenues derived from mining activity conducted by Keras.
On Thursday, Keras said the the Prince of Wales and Lindsay's projects will help the company advance toward its goal of producing 30,000 ounces of gold per year by "mid-2017".
At the Prince of Wales, Keras plans to take a staged approach with initial mining occurring under a bulk sample permit to check on the grade and geometry of the mineralisation. At Lindsay's, the company plans to imitate the staged approach used to develop the Parrot Feathers underground mine.
Keras also said it is finalising formal documentation with KalNorth that covers both the open pit and underground operations at Lindsay's, and Keras is also looking at the optimal milling alternatives for both Lindsay's and Wycheproof. These agreements are required to be in place before any works can commence.
Keras shares were down 8.6% to 1.07 pence per share on Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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