Kalgoorlie Mining Company receives $5.7m to date from Barrick gold ore processing agreement

The Kalgoorlie Mining Company (ASX: KMC) management team are continuing to build a significant cash flow generating operation at the Bullant Gold mine - which has been completed within just six months of taking ownership.

Where Kalgoorlie Mining is outpacing peers is that the company is evolving into a self funded gold exploration vehicle.

Not only does the company have a current revenue generating ore agreement with Barrick Mines' (NYSE: ABX) Australian subsidiary - which provides revenue until the company can pour its own gold next year - but it has also entered an agreement with Phoenix Gold (ASX: PXG) to mill Phoenix's ore in the future.

The significance of this for Kalgoorlie Mining is that the company has locked in current and future revenue streams, which will help build the company before the forecast 40,000 annual gold production kicks off in the June quarter of 2012.


Revenue from Barrick

Kalgoorlie Mining has now delivered the third gold ore parcel to Barrick comprising 10,921 tonnes at 3.90 grams per tonne (g/t) gold.

To date the company has mined and trucked 31,708 tonnes of gold ore to Barrick’s Kanowna Belle gold processing plant recovering 3,354 gold ounces, providing $5.7 million in gross proceeds before haulage and processing costs.


New equipment to deliver development benefits

Kalgoorlie Mining has also taken delivery of its first piece of new mining equipment this week, an Atlas Copco T1D underground single boom jumbo (pictured), which will increase the performance of the development and production fleet considerably at the mine.

Availability issues of the mining fleet have caused constraints to the mining and through the new and refurbished equipment there should be a marked improvement.

The company has also sourced an additional long‐hole open stoping rig which will increase the open stoping capacity when it arrives.

The single boom machine will allow the company to now move the larger twin boom development machine into the decline to commence extension of the Bullant decline and open up new mining levels on the “Main Lode” at depth.

The lower levels of the Bullant Decline are now fully refurbished and services have been connected in preparation for the development work to commence.

The single boom jumbo will allow the company to decrease mining widths in the ore zones thus increasing grade through less dilution. These higher grades will support stronger economics of crushing, transporting and ore sales to Kanowna Belle.


Originally published at : http://www.proactiveinvestors.com.au/companies/news/21038/kalgoorlie-mining-company-receives-57m-to-date-from-barrick-gold-ore-processing-agreement-21038.html