Kalgoorlie Mining Company (ASX: KMC) is ensuring that the company's 700,000 tonne per annum mill and processing facility at the Bullant Gold will be fully optimised when operational - by entering into an ore processing agreement with Phoenix Gold (ASX: PXG).
The agreement allows for the treatment of up to 300,000 tonnes annually of Phoenix's ore.
Phoenix has a number of advanced mining projects in close proximity to Bullant, including the company's Dam Project which is just 5 kilometres to the north, and Castle Hill which is 20 kilometres to the north-east.
Importantly - the area is well serviced by haul roads in all directions.
The ore from Phoenix will supplement Kalgoorlie Mining's own mining and milling schedules and enable the mill to optimise throughput.
On the current schedule the Bullant mill is expected to be operational in 2012 subject to a conclusion of discussions currently underway on the company's financing.
The financial result is the income stream generated by the treatment of ore will assist in repayment of the cost of the mill, and ultimately lead to an increase in revenue and profits.
Under the terms of the Memorandum of Understanding, parameters have been established that will allow for a binding “Ore Treatment Agreement” to be prepared and executed by both parties within 12 months.
Kalgoorlie Mining is forecast to produce gold in the June quarter of 2012, at an annual rate of 40,000 ounces.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/19551/kalgoorlie-mining-company-locks-in-revenue-stream-with-gold-ore-agreement-at-bullant-19551.html
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