Primary cuts cost expectations at Toms Gully
PERTH (miningweekly.com) – Emerging gold producer Primary Gold on Thursday announced that it could reduce the working capital of its Toms Gully mine, in the Northern Territory, by about 25% after identifying the potential for toll treatment of the ore.
The junior has signed a memorandum of understanding (MoU) with its major shareholder Crocodile Gold Australia Operations (CGAO), which owns the neighbouring Union Reefs mill.
The MoU would allow Primary to treat ore from the Toms Gully restart at the Union Reefs mill, subject to sufficient mill capacity.
Primary and CGAO would work together to reach an agreement on the terms of a formal agreement.
“Toll treatment during the start of Toms Gully would be an opportunity to further reduce project risk by reducing our up-front funding and working capital requirements” said Primary MD Clay Gordon.
“The feasibility study has already delivered very attractive project financials; however, toll treatment in the early phase of Toms Gully could provide additional flexibility and upside exposure.”
The feasibility study suggested that a capital investment of about A$19-million could see a mill upgrade at Toms Gully, to coincide with the start of mine production.
The project was expected to deliver some 65 000 oz/y over an initial five-year period, from a Joint Ore Reserves Committee-compliant reserve of 775 000 t, grading 6.9% gold.
Gordon noted that Primary was continuing discussions regarding project financing.
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