Westgold Resources strikes a deal to boost gold production at Meekatharra
- Westgold Resources has signed a gold ore purchase agreement with New Murchison Gold.
- The agreement is subject to NMG shareholder approval, with a meeting planned for early 2025.
- The deal is expected to increase Westgold's production and optimize costs while benefiting both companies.
In Perth, Australia, on December 12, 2024, Westgold Resources Limited announced that it has executed a gold ore purchase agreement with New Murchison Gold Limited through its subsidiary, Big Bell Gold Operations Pty Ltd. The agreement is contingent upon shareholder approval from New Murchison Gold, as Westgold holds an 18.7% stake in the company, qualifying it as a related party under the ASX Listing Rules. A general meeting for NMG shareholders is set for January or February 2025 to seek this necessary approval. Crown Prince, the site of the planned open pit operation, is located 33 kilometers from Westgold’s Bluebird processing plant and possesses a current JORC compliant mineral resource of 2.21 million tonnes at a grade of 3.9 grams per tonne of gold, amounting to an estimated 279,000 ounces of gold. The terms of the agreement stipulate that Westgold will buy between 30,000 and 50,000 tonnes of gold ore monthly from this operation, contributing significantly to its processing capacity. NMG plans to commence mining at Crown Prince in mid-2025, pending final regulatory permits. Westgold envisages that a substantial portion of the ore will be processed in the first two years of the agreement, which will help increase production efficiency and lower costs in their processing operations. With the introduction of the softer oxide ore from Crown Prince, the Bluebird plant's throughput is expected to enhance significantly. This development not only reduces costs by improving production outputs but also facilitates NMG in realizing value for its shareholders by commencing production without the burden of building a processing facility. The signing of the agreement reflects a strategic collaboration where Westgold can optimize its ore sourcing while supporting New Murchison Gold in developing the Crown Prince resource. Stakeholders in both companies anticipate positive outcomes from this arrangement, which highlights the importance of partnerships in the mining sector where leverage and resource optimization are crucial for success. Additionally, this highlights current trends in the industry where companies aim to enhance operational efficiency through agreements that reduce capital expenditure and associated risks.