Newly-listed Coolgardie Minerals has signed an ore sale agreement with Northern Star Resources for production from its Geko gold mine, which is set to come online next month.
Under the agreement, Northern Star will purchase the first 100,000 tonnes of oxide ore from the mine at a fixed gold price of $1,650 per ounce.
The ore will be supplied at a minimum grade of 2.75 grams per tonne and will be delivered in parcels of 10,000t to 25,000t over a six-month period from October until March next year.
Coolgardie said the agreement was expected to generate more than $10 million in revenue.
“This agreement is a significant milestone for the company, transitioning us from developer to producer and locking in consistent revenue through to Q2 2019,” managing director Bradd Granville said.
Coolgardie listed on the ASX last week, following a $4.2 million initial public offering.
“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,” Northern Star chief executive Stuart Tonkin said.
Coolgardie said other toll milling options were being negotiated for the remaining ore at Geko.
Shares in Coolgardie finished up 10.34 per cent at 16 cents each today.