Matsa Resources and AngloGold Ashanti have entered a five-year Ore Purchase Agreement for the procurement of ore from the Red October mine in Western Australia, and treated at the AGAA-owned Sunrise Dam gold mine.
|Lake Carey-Laverton district. Image source ©Matsa Resources|
Whilst the terms of the agreement remain confidential, the costs and revenues of the ore purchase agreement are entirely consistent with the parameters applied in the previously published mining studies.
The 3.8 million tonne per annum mill at the Sunrise Dam gold mine is located approximately 60 kilometres from the Red October gold mine and provides Matsa with access to a nearby milling solution for its Stage 1 production ore and for a further 4.5 years thereafter. Matsa has previously successfully delivered ore from its Fortitude and Red Dog gold mines to Sunrise Dam and is confident in the outcomes of the ore processed there.
According to a Company statement, Matsa will be responsible for mining and transporting the ore to Sunrise Dam with AGAA taking possession of ore once delivered.
The execution of the Agreement will allow Matsa to continue to progress mining at the Red October gold mine at a relatively low capital cost.
“The execution of the Agreement with AngloGold Ashanti continues our strong relationship and builds on the MOU both parties entered into in mid-2018,” said Matsa’s Executive Chairman, Mr Paul Poli.
“Previous mining campaigns at Fortitude and Red Dog have been successfully processed at Sunrise Dam with minimal fuss and we expect this to be no different. The fact that AngloGold are prepared to potentially accept all ore from Red October for up to 5 years is testament to this as Matsa looks to develop a longer term mine plan in the future.”
While production has commenced at Red October as previously advised, there has been a methodical build up to bringing ore to surface as finalisation of a number of items is completed and to ensure that an ore purchase agreement was in place to ensure an orderly transition into full scale mining. It is expected that first delivery of ore to Sunrise Dam will occur by the end of June 2019.
The two gold producers also worked together to identify and develop gold deposits in 2018.