PERTH (miningweekly.com) – Gold developer Phoenix Gold has signed a letter of agreement with fellow miner St Ives Gold Mining Company to acquire its 2.3-million-tonne-a-year heap leach processing plant, in Western Australia, for A$2-million.

The acquisition of the St Ives processing plant formed part of Phoenix’s staged development strategy and would allow the treatment of stockpiled lower-grade ore from the Castle Hill operation.

The current heap leach reserve stood at 15-million tonnes, grading 0.6 g/t gold for 280 000 oz of gold.

The staged development of Castle Hill would see the establishment of a two-million-tonne-a-year processing plant, and a two-million-tonne-a-year heap leach plant to treat lower-grade ore. Over an eight-year mine life, Castle Hill is expected to produce about one-million ounces of gold, with production estimated at about 129 550 oz/y.

Phoenix in April signed a two-year milling agreement with FMR Investments for the Castle Hill project, under which between 600 000 t/y and 800 000 t/y of ore would be processed at FMR’s Greenfields ore treatment facility, in Coolgardie, on a quarterly campaign basis, with no blending of any third-party ore.

Phoenix MD Jon Price said on Friday that heap leaching had always been a key part of the company’s production strategy, and securing a fit-for-purpose standalone processing plant was a fantastic result for the company.

“With the preliminary engineering study complete, the next step is to complete the detailed relocation and refurbishment engineering study and update the heap leach feasibility study, which will complement the staged development plan and joint venture opportunities with Norton Gold Fields,” said Price.

Phoenix and St Ives would execute a formal sale agreement in the September quarter of this year, subject to a further due diligence by Phoenix, as well as government and regulatory approval.

The company has paid a A$200 000 nonrefundable deposit on the plant, with a further A$1.3-million due on the removal of the dry circuit before the end of the March quarter next year, and the remaining A$500 000 due on the removing of the wet plant, before the June quarter of 2015.

The dry circuit was currently on care and maintenance, and comprises a three-stage crushing circuit. The wet plant comprises a six-stage carbon-in-column gold recovery circuit, elution circuit and carbon regeneration kiln, which is still in operation.

The acquisition included all associated fixed plant infrastructure, as well as considerable spares.