Lunnon Metals (ASX:LM8) has reached an agreement with Gold Fields’ (JSE:GFI) wholly owned subsidiary St Ives Gold Mining to vary an existing right of pre-emption that applies to future gold-bearing material from the Lady Herial deposit at its Kambalda Gold & Nickel Project (KGNP).
This variation will clear the way for both companies to enter into exclusive negotiations regarding the sale of material from Lady Herial to St Ives for treatment at St Ives’ Lefroy gold plant.
Under the agreement, Lunnon will complete a resource estimate to St Ives and metallurgical testwork based on the Lefroy gold plant flowsheet.
Lunnon, which has a market capitalisation of $46.33 million, will have 90 days to reach an agreement on the sale and purchase terms. If an agreement cannot be reached, the company will be free to negotiate with other parties for an additional 120 days.
Lunnon Managing Director Edmund Ainscough says the company is stocked to work collaboratively with Gold Fields as it seeks to secure the future treatment of Lady Herial.
“The Lefroy gold plant is without doubt the most efficient and most logical destination for any future material and we look forward to negotiating mutually beneficial terms with Gold Fields,” Ainscough says.
As part of the collaboration, Lunnon will investigate the opportunity to achieve higher recoveries of gold by including a gravity separation step in the process flowsheet in future testwork.
This outcome aims to enhance the recovery and treatability of any future ore.
Lunnon believes further improvements may also be possible with optimisation work around grind size, residence time, and reagent usage.
The St Ives Lefroy gold plant, commissioned in December 2004, operates at a current rate of 4 million tonnes per year treating oxide, transitional and fresh ore from underground and open pit mines.
Write to Aaliyah Rogan at Mining.com.au
Images: Lunnon Metals
