Lefroy Exploration (ASX:LEX) has signed a deal with BML Ventures to support the development of the Lucky Strike Gold Project in Western Australia.
BML is a private mining contractor with a track record of advancing open pit gold mines in the Kalgoorlie-Kambalda region of WA.
Under the exclusivity and heads of agreement, Lefroy and BML will — over a period of 30 business days — negotiate terms to be enacted under a formal profit-sharing deal.
Once the agreement is in place, Lefroy will grant an exclusive right to BML for open pit mining at Lucky Strike, with a profit-sharing split of 50% each.
BML will also coordinate and fund all pre-production mining approvals, capital and operating costs, and manage all mining production related activities at the project.
BML will also coordinate toll milling negotiations with third-party mill processing plant operators on behalf of Lefroy, including processing costs and scheduling of toll milling availability.
Lefroy, which has a market capitalisation of $16.14 million, says Lucky Strike represents the first of a potential series of growth projects for the company, with additional gold resources at the Mt Martin and Burns Central deposits totalling over 1 million ounces of gold.
CEO Graeme Gribbin says having now partnered with a highly experienced mining contractor, the company is looking forward to negotiating with BML over the coming weeks to secure a mine profit-share agreement.
“The proposed mining and profit share agreement, whilst mutually beneficial to both parties, presents a very low-risk pathway to development for Lefroy, with upfront capital and ongoing operating costs funded by BML Ventures,” Gribbin says.
The Lucky Strike Project hosts a mineral resource estimate of 1.27 million tonnes @ 1.95 grams per tonne gold for 79,600 ounces of contained gold.
Lefroy Exploration is a Western Australian mineral explorer focused on developing its gold and critical mineral projects.
Write to Aaliyah Rogan at Mining.com.au
Images: Lefroy Exploration
