Neometals links up with BML to extract cash from WA gold

Neometals Limited and Kalgoorlie-based mining group BML Ventures have joined forces, with the two firms inking a letter of intent (LOI) to negotiate a joint venture (JV) for the development of Neometals’ Ironclad gold deposit in WA.

The Ironclad deposit sits about halfway between the historical mining centres of Sandstone and Meekatharra and forms part of the promising Barrambie gold project, which is wholly owned by Neometals’ subsidiary company, Avanti Exploration.

Avanti and BML plan to nut out a JV to produce gold from Ironclad via open-pit mining, with BML to fund and manage all mining, haulage operations, and toll-milling, before splitting the profits 50:50 once BML has recovered all costs. 

The non-binding LOI provides the two firms with a 90-day exclusivity period to allow for mutual due diligence, the completion of an updated mineral resource, mine planning, assistance with all relevant approvals and the finalisation of definitive agreements.

Ironclad hosts an inferred mineral resource of 250,000 tonnes grading 1.6 grams per tonne (g/t) for 13,000 ounces of gold. The deposit lies in the north of the Barrambie project and is covered by a mining lease application. The license encompasses about 5 square kilometres of the total 505-square-kilometre project ground, with the JV’s scope limited to this area.

The updated resource, due in March of next year, will include 42 recently completed infill and extension reverse-circulation (RC) drill holes, along with multiple impressive results from historical drilling.

Neometals Limited managing director Chris Reed said: “We are pleased to partner with BML on advancing the Ironclad Deposit. We have had a long history with their principals, and their demonstrated capability gives us strong confidence in realising Ironclad’s potential and provides a clear, fully funded pathway toward early production. This partnership significantly de-risks development, enables early value creation, and supports the long-term growth strategy for Barrambie and Neometals.”

Previous noteworthy historical drill results include a stellar high-grade shallow gold hit of 3m at 95.7g/t from a depth of 20m, alongside 17m going 6.5g/t from 23m, 17m running at 4.42 g/t from 33m and a 26m stretch grading 2.8g/t from 3m.

Hits from surface comprised 11m at 4.1g/t, a 26m intersection returning 1.7g/t and a 27m run grading 1.53g/t, highlighting Ironclad’s shallow gold prospectivity and potential for cost-effective extraction from minimal depths.

Neometals’ total exploration area stretches across a 40km strike length of the Barrambie Greenstone Belt, host to several recorded historical mines that produced a combined average production grade of 24.8g/t gold.

Coupled with an extensive exploration dataset, Neometals last year revealed a significant exploration target across the Barrambie site, ranging from 8 million tonnes at 1.3g/t gold to 10.5 million tonnes grading 2.3g/t, for a total of between 335,000 and 775,000 ounces of gold.

Notably, Neometals says former ASX-listed entity Samson Exploration completed exploration work at the Ironclad deposit back in 1988. Apparently, according to an old Western Australia Mineral Exploration report, Samson contemplated a scenario of working multiple mines across the project grounds, all feeding into a central processing facility.

That plan didn’t proceed, however, points to the overall Barrambie project site having sufficient prospectivity to be investigated further with modern exploration methods.

At Barrambie, the geology is dominated by the northwest-trending Barrambie Greenstone Belt, with the Ironclad deposit hosted within a gabbroic unit of the Barrambie Sill.

Mineralisation is confined to discrete, narrow, sub-vertical structures with parallel and cross-cutting quartz veining of various orientations.

Recent metallurgical test work on ore from the deposit kicked-up impressive results, with gravity gold recovery of up to 71 per cent recorded from a rapid leaching process and overall gold recoveries up to 98 per cent.

BML Ventures operates its own equipment mining fleet and is rapidly forging a name for itself in the mining sector, teaming up with multiple WA mining companies to bring their gold deposits into production. The savvy partnering provides juniors with all the up-front funding needed to bring the deposits into development until the cash tap is turned on and the money begins to flow.

With the gold price still elevated above US$4200 (A$6325) per ounce, Neometals’ link-up with BML has potentially secured it with an experienced mining player to maximise cash flow from the deposit, during these times of rampaging precious metal prices. 

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au