THE BOURSE WHISPERER: BCD Resources (ASX: BCD) and Malachite Resources (ASX: MAR) have agreed to strike up a Joint Venture for the development of the Lorena gold mine following the successful completion of due diligence by both parties.
The JV will follow the terms announced by the companies under a Heads of Agreement in November 2012.
According to an announcement released by BCD to the Australian Securities Exchange the decision keeps on track the target of commencing production from Lorena before the end of this year, subject to the necessary statutory approvals.
As the due diligence period progressed BCD completed metallurgical test work and engineering feasibility work, from which it said it is satisfied it can successfully recover gold from gold concentrate produced at Lorena at its Beaconsfield facility in Tasmania.
Lorena gold project – Tenement plan. Source: Company announcement
The overall recovery of gold from ore mined at Lorena to doré is expected to be between 75 per cent and 80 per cent based on the test work carried out to date.
“Both BCD and Malachite believe that there are considerable regional opportunities once the plant is operating at Lorena,” BCD Resources said in its ASX announcement.
“Following the Stage One open cut operations both Malachite and BCD anticipate that operations may continue beyond the initial 16 month term based on potential extensions of the current Lorena resource at depth, potential new resources from surrounding prospects, and the toll treatment of third party ores.
“As previously announced, BCD has already commenced the refurbishment of its flotation cells at Beaconsfield in preparation for their being relocated to the Lorena site.
“This is part of ongoing work being carried out by BCD in order to ensure the delivery of the project by the end of 2013 as previously forecast.”