Lunnon Metals (ASX:LM8) has executed an ore purchase agreement with Gold Fields (NYSE:GFI) wholly owned subsidiary St Ives Gold Mining to sell its material mined from the Lady Herial Project in Western Australia.
The company will sell gold holding a grade of at least 0.5 grams per tonne upon completion of the final grade control model, mine design, and mine schedule, with in-pit volume surveys before and after mining.
Gold prices will be calculated monthly by incorporating grades and tonnage.
The agreement will be reconsidered or terminated if the gold price falls below $3,000 ounces for a period of 10 consecutive business days.
St Ives currently holds 67.33 million shares in Lunnon, which represents a 30.52% stake of the register.
Managing Director Edmund Ainscough says the company is grateful to come to a “very practical and workable set of terms” with Gold Fields.
“We recognised very early on that Lady Herial presented a unique opportunity to drill out, define and therefore de-risk a high-grade, outcropping, thick zone of gold mineralisation, right up front,” Ainscough says.
“So we took up that challenge and today I am delighted to announce that we have reached what we consider to be an excellent outcome for all Lunnon Metals shareholders.”
A recent scoping study at the project returned a resource estimate of 29,000 ounces of contained gold.
Lunnon Metals is a gold and nickel explorer focused on unlocking the value at St Ives and Kambalda.
Write to Maddison Elliott at Mining.com.au
Images: Lunnon Metals
