KULA Gold and WCB Resources are considering the possibility of a joint venture which would bring together Kula’s Woodlark Island Gold Project and WCB’s nearby Misima Gold Project. Both assets are on islands in Milne Bay Province and the companies believe there is significant upside in a joint development.
The two companies have signed a non-binding Memorandum of Understanding (MoU) and are initially examining the synergies between Misima and Woodlark Island with a view to maximising the value of both projects. The two advanced exploration projects are in relatively close proximity and the MoU will examine the potential benefits of barging ore from one island to the other for processing in a single larger CIP/CIL plant. A joint development along these lines could ultimately increase returns, benefiting shareholders of both WCB and Kula Gold.
The Misima and Woodlark Island gold projects are in Milne Bay Province, about 600km east of Port Moresby.
The MoU forms the framework under which the companies will work together to explore the technical and commercial benefits of a joint development. It is a non-binding MoU that expresses the wish of both companies to explore this potential, which may become an exciting opportunity. The MoU is not exclusive and allows the companies to independently progress the development of their projects.
Kula Gold chairman David Frecker said, “We see the MoU with WCB Resources as a logical and pragmatic step for Kula Gold. It opens up the possibility of combining our two projects into one large operation. The economies of scale may be the catalyst for the development of both projects, particularly in the currently low cost environment where costs have materially reduced for plant, equipment, energy and labour. If this combined development is successful it will deliver a larger gold project with expected economies of scale.”
ASX-listed Kula received the mining lease approval in July 2014 for development of a mining operation on Woodlark Island. WCB is listed on the TSX Venture Exchange.
WCB Resources CEO Cameron Switzer said, “The potential combination of the Misima Gold Project, which currently contains an indicated gold resource of 1.3 million ounces and an additional 400,000 inferred ounces in accordance with NI 43-101, and the Woodlark Island Gold Project, which contains a historical resource of 2.1 million ounces of gold in accordance with JORC standards, could lead to greater commercial returns than would the sum of the individual projects. The concept incorporates barging of ore from Woodlark approximately 170km south to Misima.”