Alchemy, Barrick in gold processing deal

West Perth-based Alchemy Resources has entered an agreement with Barrick Gold over the potential processing of gold from its Hermes project at the latter's Western Australian facilities.

Both companies have signed a memorandum of understanding to provide a framework for a future binding toll treatment or ore sale agreement.

"The MOU with Barrick will allow the Company to explore options with Barrick to commence gold production without incurring significant pre-production capital costs, which will improve the economics of the Hermes gold project," Alchemy said.

Alchemy will also place nearly 13.9 million shares to raise gross funds of $2.5 million.

The placement will take place in two tranches with the first lot of shares priced at 16 cents each and the second tranche priced at 20 cents apiece.

Proceeds from the raising will be used to further explore Hermes, obtain development approvals and mining studies.

Shares in Alchemy climbed 2.5 cents to 24c at 15:14 AEST.