GoldArc Resources (ASX:GA8) has executed a binding term sheet with Mineral Mining Services (MMS) to collaborate on a mine development pathway at the Leonora South Gold Project in Western Australia.
MMS will fund all of the initial development expenditure for the project, up to $20 million. This will be recoverable from project proceeds, meaning GoldArc will not have to provide any upfront capital to bring the asset into production.
After funding has been recovered to MMS, project cash flows will be distributed evenly across the two companies.
GoldArc will issue 7.5 million listed options at $0.04 each to MMS, each holding an expiry date of 30 June 2028.
The two parties will execute a right to mine agreement and mine development plan shortly after conditions are met, with a 24-month plan providing a firm timeline for delivery.
The term sheet originates from a letter of intent, which was orchestrated in October 2025, to establish the framework required to bring Leonora South into production.
The framework is centred on funding and management operations for production at the Orion and Sapphire gold deposits.
The two deposits host a combined inferred resource estimate of 48,014 ounces @ 2.15 grams per tonne gold, compliant with JORC reporting codes.
The JORC Code is a professional reporting standard used by mining companies for exploration results, mineral resources, and ore reserves, as reported by Mining.com.au.
The JORC Code is maintained by the Joint Ore Reserves Committee to ensure that information released to the market is accurate, balanced, and supported by appropriate technical expertise.
Orion and Sapphire are considered prospective locations within the Kookynie Goldfields, which is located 60km south of Leonora.
The district has historically produced more than 360,000 ounces @ 15 grams per tonne gold at a nearby mine.
Managing Director Paul Stephen says the conversion of the letter of intent is a “genuine milestone” for the company as both parties commit to the commercial framework for Leonora South.
“With MMS committed to funding up to $20 million of development costs at Orion-Sapphire, the capital barrier that typically prevents juniors from converting resources into production has effectively been removed,” Stephen says.
“GoldArc now has a funded development partner across both of its project hubs simultaneously, and we’re working closely with MMS to progress the formal documents and advance Leonora South into the mine planning phase.”
GoldArc Resources is a gold exploration company focused on building a foundational JORC resource while also aggressively pursuing new discoveries in Western Australia.
Write to Maddison Elliott at Mining.com.au
Images: GoldArc Resources
