THE BOURSE WHISPERER: Octagonal Resources has entered into an agreement with Unity Mining to re-process tailings from Unity’s Kangaroo Flat gold mine near Bendigo at Octagonal’s Porcupine Flat gold processing plant at Maldon in Central Victoria.
Octagonal has agreed to remove, and re-process all of the flotation concentrate tailings from the Kangaroo Flat gold mine subject to satisfactory extraction, transport, and processing of a trial parcel of up to 2,000 tonnes.
The Kangaroo Flat gold mine at Bendigo is located 25 kilometres from the Porcupine Flat plant at Maldon.
Octagonal Resources project locations. Source: Company announcement
In consideration for re-processing the Kangaroo Flat flotation concentrate tailings, Octagonal will manage and pay for 50 per cent of all costs associated with the excavation and transport of tailings to Maldon, re-processing of tailings at Maldon, and transportation, refining and sale of gold produced.
Octagonal will also pay Unity 50 per cent of the gold produced from the re-processing of the tailings.
“This is a win – win agreement for both Octagonal and Unity,” Octagonal Resources managing director Anthony Gray said in the company’s announcement to the Australian Securities Exchange.
“It provides Unity with the opportunity to remove the flotation concentrate tailings from its Kangaroo Flat site and realise value from this asset and provides Octagonal with income from third party ore by leveraging off the ability of the Porcupine Flat CIL gold processing plant to recover lower grade and finer gold than a gravity gold processing plant.”
Unity Mining owns the Kangaroo Flat gold mine, which produced gold from the Bendigo Goldfield between 2006 and 2011 using a gravity and flotation circuit.
The tailings produced from the flotation circuit are composed of quartz, sulphide, and gold, with gold grades varying between 10 grams per tonne gold and 18 grams per tonne gold.
In its announcement Octagonal explained that much of this gold mineralisation is refractory – gold associated with sulphides and not easily liberated.
The company has conducted metallurgical test work on these tailings, which it claims has indicated that the Porcupine Flat processing plant will be able to recover between 3g/t gold and 6g/t gold.