Kingwest Resources Limited (ASX:KWR) has entered into a term sheet with FMR Investments Pty Ltd for the formation of a 40% KWR / 60% FMR profit share JV to recommence mining at its first high-grade underground MRE at Yunndaga, located 6km south of the town of Menzies within the Menzies Gold Project (MGP).
The Yunndaga underground JORC Mineral Resource Estimate (MRE) comprises 57,000 oz @ 4.6 g/t Au (3.0 g/t Au cut off) or 79,200 oz @ 3.7g/t Au (2.0 g/t Au cut off) – open at depth and to the north/
Kingwest CEO, Ed Turner, said the parties have agreed to negotiate in good faith with a view to entering into a formal joint venture agreement by no later than 30 November 2021 (or such other date as agreed by the parties).
“We are very pleased to complete a Joint Venture mining agreement with FMR. To recommence commercial mining at Menzies after more than 20 years since open cut mining finished and 85 years since it was last mined from underground at Yunndaga is very significant,” Mr Turner said.
“This is expected to be the first of a number of mining operations at Menzies and to deliver attractive shortand medium-term cash inflow to KWR. KWR will continue to focus on the very exciting potential we are seeing at Goongarrie as well as proving up new gold resources at Menzies over time. I am sure there remains many more ounces of gold to be discovered at both projects.”
FMR is a long-established Australian organisation with interests predominantly in mining and mining related industries. FMR originally operated as specialist underground mining contractors until its contracting business, Barminco Limited, was sold in 2007. Today, FMR operates the Eloise Copper Mine, Gordon Sirdar Gold Mine and the Greenfield Mill at Coolgardie which toll treats ore from a number of regional mining project.
1. JV to cover 180,000 (mined contained) gold ounces produced from the YMZ or five years from the commencement of mining at the YMZ, whichever occurs first. Upon termination of the JV, full control of the YMZ and its operations will revert 100% to KWR.
2. FMR completes drilling from surface at FMR’s cost for due diligence purposes. FMR will commit to completing this within six months of a signed JV Agreement.
3. FMR will pay KWR a non-refundable payment of $500,000 within 1 month of the signing of the JV Agreement and a further non-refundable payment of $500,000, due within one month after first cut in the decline is fired.
4. The YMZ is to be mined and processed according to a Mining and Production Schedule to be agreed between FMR and KWR and included in the JV Agreement. 5. FMR will fund all exploration, development, mining, treatment and rehabilitation activities at the YMZ during the term of the JV.
6. FMR will be responsible for the Project Management Plan for the YMZ. KWR will be responsible for the Mining Proposal (including Mine Closure Plan) and other tenement items such as environmental, bonds, water licensing, waste dump approvals etc.
7. Milling of any ore extracted from the YMZ will occur at FMR’s Greenfield’s Mill and is to be charged to the JV at a fixed rate per dry metric tonne.
8. The terms sheet remains subject to completion of due diligence by both parties and KWR and FMR entering into a binding JV Agreement.
The MGP has recorded historical production of 643,200 oz @ 22.5g/t Au from underground (U/G) between 1895 and 1943 plus 145,000 oz @ 2.6g/t Au2 open cut between 1995 and 1999, for a total of 787,200 oz @ 18.9g/t Au.
For further information please visit: https://www.kingwestresources.com.au/