Perth-based gold outfit Kingwest Resources has rubber-stamped a mining and processing joint venture with FMR Investments which will see the company resume underground mining at the Yuundaga Deposit located in the Menzies Gold Project north of Kalgoorlie. The deposit was last mined 85 years ago and produced 526,000 tonnes at 16 grams per tonne gold for 270,000 ounces. The nearby Sir Laurence discovery at Lake Goongarrie is also set to be extended with five new gold anomalous zones detected and follow up drilling imminent.
Kingwest says the partnership with FMR Investments earmarks the first step in unlocking the commercial potential of the Menzies Gold Project.
The joint venture will account for the first of either 180,000 ounces of gold or five years after mining commencement. The terms of the JV will see FMR bearing all the capital costs for mining, haulage and processing through their Greenfields Mill and taking 60 per cent of the profits with Kingwest due the balance.
Within one month of signing the deal, FMR will make a non-refundable payment of $500,000 to Kingwest with a further non-refundable $500,000 payment to be made within a month of the first cut in the decline being fired.
FMR, which previously operated as Barminco, has investment interests in several mining and associated industries. The company operates a number of mining and milling projects including the Eloise Copper Mine in Queensland, Gordan Sidar Gold Mine in Kalgoorlie and the Greenfields Mill at Coolgardie.
Historical mining at Yunndaga, which sits in the Menzies Gold Project, found multiple high-grade shoots at depths of 600 vertical metres. Including the Princess May shoot which produced 270,000 ounces of gold.
The JORC Mineral Resource Estimate at the Yunndaga underground mine covers 57,000 ounces at 4.6 g/t gold with a 3 g/t threshold or 79,000 ounces at 3.7 g/t gold with a 2 g/t threshold.
Kingwest Resources CEO, Ed Turner said: “To recommence commercial mining at Menzies after more than 20 years since open cut mining finished and 85 years since it was last mined from underground at Yunndaga is very significant.
This is expected to be the first of a number of mining operations at Menzies and to deliver attractive short- and medium-term cash inflow to KWR. KWR will continue to focus on the very exciting potential we are seeing at Goongarrie as well as proving up new gold resources at Menzies over time. I am sure there remains many more ounces of gold to be discovered at both projects.”
Kingwest also recently revealed a cracking set of drill results at their Sir Laurence discovery at Lake Goongarrie with five new gold anomalous zones detected following aircore drilling. The campaign unearthed a proven gold mineralised system over 500m in width and 200m of strike at Sir Laurence and the company says mineralisation is open in all directions
The blind discovery found beneath lake sediments will be further tested with a drilling program set to commence in 4 weeks.
The follow-up campaign will comprise of a 1,000m diamond drill program to test the Sir Laurence prospect and a 6,000m aircore drilling program to test litho-structural targets along strike to the south and north of Sir Laurence.
A supplementary 2000m aircore program will test the 5 new discoveries.
Both the Menzies and Lake Goongarie gold projects are located in the highly prospective Eastern Gold Field’s region of Western Australia. Notably, both projects are close to regional infrastructure and are within trucking distance from several processing plants.
With a freshly minted joint venture agreement to re-commence underground mining at the Menzies gold project, the Lake Goongarrie resource set to be extended and a handful of potential targets begging to see the hot end of the drill bit, Kingwest looks to have caught the wind in its sails.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
