MacPhersons and Reed enter Nimbus MOU
THE BOURSE WHISPERER: Some interesting acquisition activity on the Goldfields has resulted in MacPhersons Reward Gold enter a binding Memorandum of Understanding with regional mainstay Reed Resources/
Under the MOU MacPhersons is set to acquire the assets of Reed’s Nimbus silver project, located at Kalgoorlie, including mine, mill and polymetallic deposits.
The package comes with granted mining tenements with recent silver production of 3.616 million ounces of silver from 318,992 tonnes at a grade of 353 grams per tonne silver, and various polymetallic deposits in the advanced stages of exploration.
It also includes the permitted processing facility with works underway for mill expansion and design of a gold processing circuit, which will allow for direct processing of gold-bearing production material from the MacPhersons operations located at Coolgardie 55km away.
Exploration results at Nimbus indicate a zinc – polymetallic exploration target with a range of 200,000 – 400,000 tonnes grading 5 – 6% Zinc, 100 – 200 g/t silver, 0.8 – 1.0% lead. Anomalous gold and copper zones have also been identified.
MacPhersons Reward has continued to expand its in-pit drilling at the MacPhersons Reward mine operations at Coolgardie with a view of looking at near-term production opportunities.
The company’s reasoning behind the acquisition of the Nimbus silver mine is so it can fast track the opportunity to process MacPhersons ore in-house.
“The assets come with an approved site for metallic and non-metallic ore processing and an approved tailings storage facility,” MacPhersons said in an announcement.
“The assets have advanced exploration targets on the silver deposits below two existing open cuts (recently produced 3.6 million ounces of silver) and with polymetallic deposits carrying zinc – silver – lead mineralisation with zones of anomalous gold and copper values.”
The Nimbus project, located 10 kilometres from Kalgoorlie comprises two granted mining leases.
Mining in early 2004 and produced approximately 3.6 million ounces of silver from two open pits before ceasing operations in 2007.
The processing plant was placed on care and maintenance in late 2007. There is base metal exploration upside and in-situ high-grade silver mineralization beneath the current pit floors.
Explaining his company’s rationale for entering the MOU Reed Resources managing director Chris Reed said Nimbus had become a non-core asset for the company, provided treatment access for its Sand Queen ore can be preserved.
“This disposal has the dual benefit of retaining a treatment option for Sand Queen whilst relieving the group of the capital cost and management time of the nimbus refurbishment process.
“We are updating the mine plan for the resumption of operations at Sand Queen to coincide with the recommissioning of Nimbus,” Reed said in a company announcement.
“The recent history of high-grade production (80,000 tonnes at 10 grams per tonne gold) and the existing underground and surface infrastructure should ensure the restart is low-risk with a low-capital cost.
“Our current high-grade resource inventory at Sand Queen (186,000 ounces at 10.8 grams per tonne gold) in the current gold price environment with a milling solution is a great asset.
“We are reviewing options to maximise theh value of the Sand Queen assets in the context of the gold business unit and the wider group structure, to allow the executive team to focus on iots three core assets, Meekatharra, Mt Marion and Barrambie.
“We expect the period to the end of 2012 to be one of great progress.”
The agreement is subject to conditions precedent including due diligence and formal documentation.
MacPhersons Reward Gold is currently drilling in-pit in the MacPhersons – Powell open pit mines and the Tycho greenfields discovery area.
The company has completed its first drilling program at Bakers Find, Franks Find and the Tycho deposits.
Assessments of the deposits are underway and MacPhersons is examining options to near-term production.