THE BOURSE WHISPERER: Matsa Resources (ASX: MAT) has executed an Ore Purchase Agreement with AngloGold Ashanti Australia covering the purchase of ore from the former’s Red October mine which is to be treated at the AGAA-owned Sunrise Dam gold mine, for up to five years.
Matsa Resources said the terms of the agreement remain confidential; however, it did say that costs and revenues of the ore purchase agreement are entirely consistent with the parameters applied in its previously published mining studies.
The 3.8 million tonne per annum mill at the Sunrise Dam gold mine is located approximately 60 kms from the Red October gold mine and provides Matsa with access to a nearby milling solution for its Stage 1 production ore and for a further 4.5 years thereafter.
Matsa has previously delivered ore from its Fortitude and Red Dog gold mines to Sunrise Dam and remains confident in the outcomes of the ore processed there.
The company will be responsible for mining and transporting the ore to Sunrise Dam with AGAA taking possession of ore once delivered.
Matsa Resources declared the agreement will allow it to progress mining at the Red October gold mine at a relatively low capital cost.
“The execution of the agreement with AngloGold Ashanti continues our strong relationship and builds on the MoU both parties entered into in mid-2018,” Matsa Resources executive chairman Paul Poli said in the company’s announcement to the Australian Securities Exchange.
“Previous mining campaigns at Fortitude and Red Dog have been successfully processed at Sunrise Dam with minimal fuss and we expect this to be no different.
“The fact that AngloGold are prepared to potentially accept all ore from Red October for up to five years is testament to this as Matsa looks to develop a longer term mine plan in the future.”
Matsa added that while production has commenced at Red October, as previously advised, there has been a methodical build up to bringing ore to surface as finalisation of a number of items is completed and to ensure that an ore purchase agreement was in place to ensure an orderly transition into full scale mining.
The company expects first delivery of ore to Sunrise Dam will occur by the end of June 2019.