THE BOURSE WHISPERER: Kin Mining (ASX: KIN) has entered into an Option to Purchase Agreement with Agnew Gold Mining Company to acquire the Lawlers processing facility.
Kin Mining indicated the Lawlers plant will be relocated and upgraded to meet Kin’s processing requirements at the company’s Leonora gold project (LGP) in Western Australia.
Kin Mining has completed due diligence, which established the Lawlers plant to be ideal for the LGP as it provides a large proportion of the key processing equipment, ancillary items and infrastructure required to establish the project.
The purchase agreement requires Kin to make a first payment of $1.2 million upon settlement with a second and final payment of $1.2 million due at the first anniversary of settlement, likely to be mid-2018.
Kin has already paid Gold Fields $100,000 as part of the exclusivity fee, which forms part of the total purchase price.
The plant has been on care and maintenance for 21 months.
It has a capacity of approximately 800,000 tonnes per annum and although having been decommissioned by Gold Fields it comes with a substantial inventory of spare parts.
Inclusive of the purchase will be the laboratory, warehouse, administration buildings along with plant design and construction drawings, which Kin said will save engineering costs and time.
“The Lawlers processing plant option offers Kin a cost effective and rapid pathway to early gold production,” Kin Mining managing director Don Harper said in the company’s announcement to the Australian Securities Exchange.
“We are planning to optimise the Lawlers plant by carefully evaluating the metallurgical characteristics of the various potential LGP ore types.
“Following the recent discovery of the Lewis primary ore zone, we are confirming the optimal process flowsheet and throughput given the likely enhancement in grade to be presented to the Cardinia mill.
“Securing the Lawlers processing plant provides a boost to the development of the LGP and demonstrates the company’s commitment to maximising shareholder value, by taking such opportunities to fast-track gold production.”