Northern Star Resources and Coolgardie Minerals have entered into an agreement for the purchase of gold-hosting ore from Coolgardie’s Geko gold mine in Western Australia, which is set to ship first ore in October.
The agreement is expected to generate $10 million in revenue for the junior miner.
“This agreement is a significant milestone for the company, transitioning us from developer to producer and locking in consistent revenue through to Q2 2019,” said Bradd Granville, managing director of Coolgardie Minerals.
Coolgardie will supply the first 100,000t of oxide ore from the Geko mine to Northern Star at a fixed price of $1650/oz of gold at a minimum grade of 2.75g/t. The delivery will take place over six months from October 1, 2018–March 31, 2019 in deliveries of 10,000–25,000t each.
Geko hosts a JORC 2012-compliant proved and probable mineral reserve of 1.58Mt at an average of 1.81g/t for 91,900oz of contained gold at a 1g/t cutoff.
Stuart Tonkin, chief executive officer of Northern Star said, “This agreement represents an opportunity to partner with an emerging junior in the Coolgardie area for the benefit of both parties and is consistent with our regional hub strategy following our acquisition of the South Kalgoorlie operations earlier this year.”