THE BOURSE WHISPERER: Mutiny Gold (ASX: MYG) has informed the market it is currently in advanced discussions with a local producer to commercialise the iron ore assets contained in its Gullewa project area, located within the Murchison Region of Western Australia.
Mutiny said the iron ore could potentially generate early cash flow within the next six to eight months.
The company indicated it is also in detailed negotiations with a large mining contractor to form a potential partnership to develop its Rocksteady asset with the partner supplying mining equipment and start-up funding.
Mutiny has previously announced its Gullewa tenements contain iron mineralisation within numerous banded iron formation (“BIF”) units.
These BIF units are interpreted to have a total length of approximately 150 kilometres and are considered to be underexplored having been previously drilled for iron ore mineralisation at only two locations being the Rocksteady and Brandy Hill prospects.
At both of these prospects iron mineralisation was intersected.
Mutiny said it had always looked at the development of the iron assets and their proximity to key infrastructure as a possibility since it acquired the Gullewa tenements in June 2010.
The project is located approximately 50km from a railway, and 200km from the Port of Geraldton.
“The company has always highlighted the mineral endowment contained within the Gullewa tenements and the variety of development opportunities they contain and maintained a strongly announced company objective of being a multi-mine operator,” Mutiny gold managing director John Greeve said in the company’s announcement to the Australian Securities Exchange.
“A Rocksteady development has always been one of our key, early stage development options at Gullewa and right now a ‘window of opportunity’ has opened up for Mutiny and we intend taking advantage of it, with the very real potential for Mutiny to be earning cash from this development by early to mid-2014.
“Rocksteady is located on an already granted Mining Lease and there is sufficient evidence to suggest that there is significant upside for adding substantial quantities of DSO quality hematite.
“In this regard we have also entered into discussions to quickly begin a significant new drilling program there.”
Mutiny considers the proposed development as a win/win situation as it will:
Allow the company to be cash flow positive;
Allow the company to develop a valuable asset; and
Allow it to continue to build the Deflector gold-copper project into a company making asset.