THE BOURSE WHISPERER: GWR Group Limited (ASX: GWR) has executed a non-binding Memorandum of Understanding (MoU) with Blackham Resources (ASX: BLK) with respect to the company’s Wiluna West gold project.
Blackham Resources is the owner and operator of the Matilda/Wiluna gold operation, which includes a recently re-commissioned processing and treatment plant, located 40 kilometres from the Wiluna West gold project.
The Wiluna West gold project contains JORC (2004) compliant Mineral Resources of 3,478,000 tonnes at 2.3 grams per tonne gold for an estimated 258,200 ounces of gold (at a 1g/t lower cut off), including an Indicated Resource estimate of 46,000 tonnes at 3.5g/t gold for 5,200 ounces and an Inferred Resource estimate of 3,432,000 tonnes at 2.3g/t gold for 253,000 ounces.
GWR said the MoU sets the framework the two companies to delineate, study and mine gold deposits at Wiluna West and process at Blackham’s 100 per cent-owned Wiluna gold plant.
The MoU assumes the parties will agree to either a profit sharing or ore sales arrangement for Wiluna West.
GWR will be responsible for drilling the gold deposits out to JORC (2012) compliant level with a minimum Indicated category as well as for initial sighter metallurgical testwork associated with the deposits.
Following resource definition and initial metallurgical testwork, GWR may propose the deposit to Blackham as a Proposed Qualifying Deposit, at which time, Blackham will undertake a Feasibility Study (to a minimum Pre-Feasibility Study level) to determine the economic potential of the project.
Upon completion of a positive Feasibility Study for a Qualifying Deposit, Blackham will be entitled to make an offer to GWR that schedules the mining and processing of ore from the Qualifying Deposit following receipt of necessary permits and approvals.
Blackham will be responsible managing the mining, transport and processing of ore from a Qualifying Deposits unless it elects to purchase ore from GWR delivered to the Wiluna gold plant ROM.
If mining does occur, Blackham will pay GWR either its profit share or ore sales proceeds on a monthly basis.
“The MoU with Blackham is an important step in potentially monetising the Wiluna West gold project,” GWR Group chief executive officer Craig Ferrier said in the company’s announcement to the Australian Securities Exchange.
“The commencement of operations by Blackham and their willingness to enter into the MoU provides a significant opportunity for GWR.
“The current size of the Wiluna West gold deposits does not justify the construction of a standalone processing plant, however access to the Wiluna gold plant provides GWR with a low capital option for development and the opportunity to realise value for shareholders.”
GWR indicated it has commenced a detailed review of both the Golden Monarch and Emu / Eagle deposits and is planning drilling programs that will upgrade the current JORC (2004) Inferred Resources to JORC (2012) compliant confidence level of Indicated or higher.
As part of the proposed drilling program, larger composite samples will be collected for the sighter metallurgical testwork program.
The company anticipates these programs will be undertaken in the first half of 2017.
The Golden Monarch and Emu / Eagle deposits are upon granted Mining Leases and are within areas that Clearing Permits have already been granted as part of the Wiluna West iron ore project approvals.