The board of Calidus Resources (ASX:CAI) has approved the development of the Blue Bar Project in Western Australia as the company executes a binding profit share agreement with gold explorer Haoma Mining.
The board approval allows agreements to be finalised with Blue Bar mining contract partners and for pre-mobilisation activities to begin for a planned mobilisation in mid-to-late January 2024.
Under the profit share deal, Calidus, which has a market capitalisation of $103.74 million, will issue about 5.6 million shares to Haoma and pay $12 per tonne milled.
Within 12 months of the cessation of mining activities, Calidus will conduct a full reconciliation of profit generated at spot gold by the operation and an adjustment will be paid by either party to reflect that a 40% profit share has been received by Haoma.
The company says it is assumed that Blue Bar will be mined by an open pit due to its proximity to the surface and the results of initial pit optimisations.
Blue Bar is the first of the projects to be developed under the Haoma joint venture (JV) structure, which monetises ‘higher-grade’ satellite projects in the region that do not have the scale to justify a standalone plant.
Calidus Resources is an ASX-listed gold explorer and developer focused on its Warrawoona Gold Project in the East Pilbara district of the Pilbara Goldfields in Western Australia.
As of 30 September 2023, the company had $15.2 million cash at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Calidus Resources