Laneway Resources Georgetown Project

Laneway secures strategic gold plant and tenement package near Agate Creek project

Laneway Resources (ASX: LNY) has inked an agreement to acquire Masterson Minerals Pty Ltd, owner of the Georgetown gold processing plant and an ‘extensive’ portfolio of mining and exploration leases in North Queensland.

The strategic acquisition, expected to be complete in mid-April 2022, is for a total consideration of approximately $17 million payable in stages through to October 2022, along with 100 million Laneway ordinary shares and 100m options to acquire ordinary shares @1.5c each. A 1% net smelter royalty will also be payable on gold produced from the acquired tenements up to a maximum of $5 million.

The deal is anticipated to transform operations at Laneway’s Agate Creek gold mine and underpin the company’s regional expansion strategy.

Commenting on the deal, Laneway Resources Managing Director Brad Gordon said: “The acquisition of the Georgetown Gold Project provides Laneway with a unique opportunity to expand our footprint in the Etheridge Goldfields region and create substantial value for Laneway shareholders by leveraging the existing production infrastructure of Georgetown, the substantial exploration potential of its Exploration and Mining Leases and multiple processing growth options to underpin a longer term production growth profile for Laneway.

Processing of high grade Agate Creek ore through the Georgetown facility will provide a substantial cash flow to Laneway and eliminate the previous reliance on third party milling facilities”

Processing of high grade Agate Creek ore through the Georgetown facility will provide a substantial cash flow to Laneway and eliminate the previous reliance on third party milling facilities cutting cash costs by up to an estimated $100 per tonne. Laneway envisages the resultant cash flow will also eventually fund the construction of a second mill at Agate Creek, once permitting and environmental approvals are in place, to monetise the 471k oz we have in oxide JORC Mineral Resources there, and also fund a broader appraisal of the projects with a view to materially expanding the Mineral Resources.

Given the endowment of Georgetown’s tenements and the central location of the Georgetown plant to other stranded gold resources in the region we see excellent potential for the development of a regional processing hub at Georgetown focused on sulphide resources. Laneway should thus emerge with two production centres processing oxide and sulphide ores, underpinning a strong growth profile in production.”

The Georgetown Project consists of a CIP Mill which historically operated at >200,000tpa, located 7km from the centre of the Georgetown township and 100km by road north of Laneway’s Agate Creek Mine. The Project is located in a traditional mining province with over 1,000 mines, prospects & mineral occurrences, including the 3.4Moz Kidston deposit.

The plant was fully refurbished in 2010 and has has seen only limited use since. Laneway notes that the mill has potential for a rapid and ‘low-cost’ restart and is suitable for processing of ore from Agate Creek, having previously processed bulk sample ore from the project.

Map of Laneway Resources tenements including Agate Creek in the south and the newly-acquired Georgetown Project in the north
Map of Laneway Resources tenements including Agate Creek in the south and the newly-acquired Georgetown Project in the north

The Georgetown Project also includes of a package of tenements made up of 13 exploration permits and 17 mining leases covering 515km², with ‘significant’ potential for additional mining to occur along strike and/or down-dip of previously mined areas.

The company notes that there is scope for large, high-grade sulphide-hosted gold resources below historically-mined oxide pits. Environmental permitting approvals would however be required for mining and processing of these targets.

The leases contain 112 existing pits, many of which have never been drilled, and 52 of which bottomed in sulphidic ore. Laneway has already identified Inferred JORC Mineral Resources totalling 951,000t @ 3.9g/t for 119,000oz Au from five of the prospect areas.

Looking forward, Laneway is targeting two production centres: Georgetown which will be available in the near-term for processing Agate Creek high grade ore and longer term as a central toll treatment facility, along with Agate Creek to monetise the current oxide 471,000oz Au JORC Mineral Resource.

The company has also planned an upgrade of the initial Georgetown JORC Mineral Resources for later in 2022, together with resource drilling for the next stage of mining at Agate Creek.

Images: Laneway Resources Limited
Written By Jonathan Norris
Jonathan is a founder of Mining.com.au and has been covering the resources industry since 2018. With over 17 years experience in print, broadcast and online media, Jonathan has seen first hand the transformative effect of online niche media.