Westgold Resources and Musgrave Minerals have signed a non-binding term sheet to share mining and profits for mines in the vicinity of Westgold’s Tuckabianna and Bluebird processing plants in Western Australia. Westgold acquired 15 per cent of Musgrave via a $3.36 million placement in May.
The arrangement will see Westgold fund Musgrave’s mining in the region on an at-cost basis, with generated revenues after cost reimbursements being split between the two parties.
It is an arrangement Westgold has used with other junior miners in the Kalgoorlie region, such as the deal made with Southern Gold in January, where Westgold took on financial and operating risks at the company’s Cannon gold mine in return for a five-year right to mine a 1km radius covering the Cannon project area.
The deal will cover known resources and immediate extensions within 100m in any direction of the Lena, Jasper Queen, Gilt Edge, Rapier South and Break of Day deposits.
Westgold managing director Peter Cook said he was delighted with the agreement, “This term sheet with Musgrave should enable the exploitation of its known resources in the Murchison region without the usual imposts and risks that prevent juniors from getting projects up.
“Musgrave is a good little explorer with plenty of targets and we are happy to fund it to do what it does best.”