Just a few months after starting to mine, Coolgardie Minerals has begun gold ore production at its Geko mine near Coolgardie, Western Australia.
Two months after announcing the start of mining, Coolgardie Minerals (ASX:CM1) has begun gold ore production at its Geko mine near Coolgardie, Western Australia.
According to the company, the ore has been mined and stockpiled with an initial mined grade of 3.5 grams per tonne (g/t) gold. The company intends to begin sales of the oxide ore in mid-November.
“This is another milestone for the company as we continue to achieve our targets in line with the mine plan,” Coolgardie Managing Director Bradd Granville said in a statement.
“Revenue will commence next month from our ore sales to Northern Star and the 1.6 million tonne reserve will continue to be mined over the next 13 months,” he added.
In September, Coolgardie entered into an ore sale agreement with Northern Star Resources (ASX:NST) for the sale of up to 100,000 tonnes of oxide ore from Geko.
Under the agreement, ore supplied must be a minimum grade of 2.75 g/t, and must be delivered in 10,000- to 25,000-tonne batches over a six-month period from October 1, 2018 to March 31, 2019. The ore will be sold at a fixed price of AU$1,650 per ounce, with the agreement as a whole being expected to generate over $10 million in revenue for Coolgardie.
Coolgardie says that negotiations are currently underway for additional toll milling agreements with nearby gold treatment facilities. The Geko gold mine has a mineral reserve of 1.57 million tonnes of ore at an average grade of 1.8 g/t gold containing 91,900 ounces.
The company began work on Geko in October 2015 with the commissioning of a gap analysis. Following standard procedures, subsequent studies took place in the months afterwards, with a bankable feasibility study being commissioned and completed in February 2017.
Mining officially began at the project in August 2018.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.