Lefroy Exploration (ASX:LEX) and privately held BML Ventures have entered into a profit-sharing mining agreement for the Lucky Strike Gold Project in Western Australia.
BML, which is a Goldfields-based company that funds, develops, and operates open pit gold mines, will be appointed as the statutory mine operator and manage all mining activities and approvals, as well as fund all capital and operating costs required to advance Lucky Strike.
Under the agreement, Lefroy will grant BML an exclusive right to conduct open pit mining at the project, with a profit-sharing 50:50 basis. BML will begin mining at Lucky Strike within 18 months of signing the agreement, subject to being satisfied on the agreed terms.
The company is actively working with BML on several toll milling production arrangements and is in the final stages towards securing a processing agreement to secure toll milling capacity. Lefroy expects to update the market on negotiations before the end of the March quarter period.
Prior to the execution of this profit-sharing agreement, the company also started coordinating environmental permitting and approvals at Lucky Strike. Following the execution of this agreement, BML will take the lead on funding and finalising these approvals, with both parties working towards approvals.
As part of pre-mining works, Lefroy has agreed to fund a small, shallow, resource infill and extensional RC drilling program (3,000m), targeting the top 50m of the proposed mining area at Lucky Strike. This drilling program (scheduled to begin later February 2025), supported by a recently completed detailed geological model of the mineralisation host rocks at Lucky Strike, will strengthen the resource model and facilitate further pit shell optimisation work and to support finalisation of mine planning
Lefroy CEO Graeme Gribbin says this partnership represents a defining moment for Lefroy, as it takes a next step forward for Lucky Strike.
“Importantly, as stated in December 2024, this agreement represents a mutually beneficial agreement for both parties, offering a very low-risk pathway to development for Lefroy, while engaging the services of an experienced mining contractor in BML to oversee, navigate, and manage approvals and mining process, with Lefroy exposed to minimal upfront cash contributions,” Gribbin says.
Prior to executing this agreement, Lefroy, which has a market capitalisation of $19.32 million, began coordinating environmental permitting and approvals at Lucky Strike. BML will now take the lead on this and finalise the approvals.
The Lucky Strike Project has a mineral resource of 1.27 million tonnes @ 1.95 grams per tonne gold for 79,600 ounces of contained gold.
BML Ventures is a mining contractor based in Kalgoorlie. The company uses its low-cost owned and operated mining fleet and its relationship with local toll treatment operators to maximise profitability and cash generation for small to medium sized mining projects.
Lefroy Exploration is a Western Australian explorer focused on gold and critical minerals.
Write to Aaliyah Rogan at Mining.com.au
Images: Lefroy Exploration
