In a transformational move, BMG Resources has executed a memorandum of understanding (MoU) clearing a path to toll treatment of its Abercromby gold ore at Wiluna Mining Corporation’s Matilda plant.
Wiluna Mining’s fully operational conventional carbon-in-leach (CIL) gold ore processing facility is 20 kilometres northeast of BMG’s project and is well-suited to process the company’s Abercromby ore.
The well-credentialled operation processes Wiluna Mining’s ore and accepts third-party feed.
The MoU lays out a structure for the two companies to enter an ore toll treatment arrangement to mill and process the Abercromby ore. It offers an ideal processing solution to support BMG’s mine development scoping study for Abercromby to deliver a practicable financial model.
BMG has worked up a handsome resource at Abercromby comprising 11.12 million tonnes averaging 1.45 grams per tonne (g/t) gold for 518,000 ounces of the precious metal.
The resource comprises open pit and underground inferred resources totalling 353,000 ounces of gold, while indicated open pit and underground resources make up a further 165,000 ounces of gold.
BMG Resources non-executive chairman said: “With gold prices at record highs, we are excited to now accelerate feasibility studies for a mining operation at Abercromby that could quickly deliver very significant value for shareholders. With a large open-pit MRE located on a granted mining lease, location close to infrastructure and now a clear gold milling solution, Abercromby offers potential for a low-capex, fast-tracked development.”
Metallurgical testwork has shown Abercromby’s near-surface, free-milling ore to be amenable to conventional CIL processing.
BMG says the global resource features high-grade gold zones, including 935,000 tonnes at 5.06g/t gold for 150,000 ounces, which could be selectively mined in an earlier stage of mine development.
BMG envisages delivering ore to the Matilda run-of-mine pad. Wiluna Mining will crush and process the ore, then deliver the gold to a yet-to-be-agreed refinery.
BMG anticipates retaining title to the ore during the process. The processing fee will likely be based on a fixed rate per tonne of ore processed, subject to adjustments.
Abercromby offers BMG advantages beyond its favourable compatible metallurgy. The project is on a granted mining lease, which eases the mine permitting process, and it is close to infrastructure, including grid power and trafficable roads and at 20km from the Matilda plant, it is within close ore-hauling distance.
The soaring gold price also supports BMG’s plans to advance its commercial strategy for accelerating Abercromby to near-term development and early exploitation.
The new MoU and imminent finalisation of a toll-treating arrangement represent a giant step towards the company’s transition from developer to producer.
BMG is now pressing ahead with a scoping study to evaluate Abercromby’s best low-capex, high-margin options for a potential earliest possible mining venture.
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By Doug Bright
