Forrestania Resources (ASX:FRS) has inked an ore purchase agreement and a five-year master services agreement with MEGA Resources to support its processing hub strategy.
Under the ore purchase agreement, Forrestania will be able to acquire and process up to 2 million tonnes of ore over 24 months through either its Lake Johnston or Edna May processing facilities in Western Australia.
The framework enables campaign-based processing in parcel sizes of 50,000–150,000 tonnes, subject to agreed grade, metallurgical, and acceptance criteria.
Forrestania will hold title to the delivered ore and retain ownership of all recovered gold and associated minerals. Commercial payments to MEGA Resources will be calculated using a baseline pricing formula of $155 per tonne at an ore grade of 1.43 grams per tonne gold and a 91% processing recovery rate.
Initial ore supply under the agreement will be sourced from existing stockpiles at MEGA Resources’ Taipan open pit.
In tandem, the master services agreement establishes commercial, operational, safety, and governance terms for MEGA Resources to provide future mining services through project-specific work orders.
Services cover open pit operations, drill and blast, ore and waste movement, site establishment, and mobilisation. The agreement contains no minimum work volume commitments.
Executive Chairman David Geraghty says the agreements represent an important step in advancing Forrestania’s processing hub strategy and restart readiness initiatives.
“The agreement provides a commercial framework to source and process third-party ore through our Lake Johnston and Edna May facilities, whilst the master services agreement establishes a long-term strategic relationship with an experienced mining contractor and provides Forrestania with flexibility and optionality as we progress future mining developments across our portfolio,” Geraghty says.
The combined agreements support Forrestania’s plans to build scalable production hubs at Lake Johnston and Edna May across Western Australia’s Southern Cross, Eastern Goldfields, and Forrestania regions.
Forrestania Resources is focused on building a Western Australian gold business through exploration and acquisitions.
Write to Paula Fabe at Mining.com.au
Images: Forrestania Resources
