ABM inks deal with Tanami over Coyote plant
PERTH (miningweekly.com) – Junior gold miner ABM Resources has reached an agreement with Tanami Exploration, a wholly-owned subsidiary of fellow-listed Tanami Gold, to lease the Coyote gold plant and associated infrastructure, in Western Australia.
ABM would also have the option to purchase the Coyote mine, the infrastructure and the underlying mineral leases.
Tanami told shareholders on Monday that previous drilling at the Kavanagh lode at the Coyote gold mine had prompted the company to re-evaluate plans for the Coyote mine.
An assessment revealed that reopening the operation would prove uneconomic for Tanami, and based on the previous drill results, Tanami could not justify any further drilling at the Coyote mining lease.
Under the new agreement, ABN would use the Coyote gold plant to process ore from its own Old Pirate deposit, in the Northern Territory – a haulage distance of some 77 km.
The lease infrastructure would include a 240 000 t/y capacity gravity and carbon-in-each gold plant, as well as all other related surface infrastructure, including airstrip, mobile equipment, tailings storage, workshop, offices and camp.
ABM would make a A$2-million lease payment for the first 12 months of production, and would have the option to extend the lease period for a further 12 months for a payment of a further A$2-million.
The company also had the option to purchase the Coyote mine and infrastructure for A$3-million.
ABM said on Monday that the lease agreement would fast-track the company’s next stage openpit development at its Old Pirate deposit, and would reduce the capital expenditure requirements for the project, as well as the construction and commissioning risk.
The agreement further provided scaleability for the Old Pirate project, and reduced its environmental footprint.
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