WA gold developer Forrestania Resources has locked in major operational agreements and a significant ore purchase deal as it advances its strategy of becoming the State's next gold producer at its two processing hubs in the Eastern Goldfields, Lake Johnston and Edna May.
The company has executed an ore purchase agreement with ASX-listed First Au that could see it process up to a whopping two million tonnes of third-party ore from the latter’s Gimlet project over 24 months, providing much-needed early feed for its hungry two-hub gold processing strategy.
The deal provides a framework for Forrestania to purchase and process ore in campaigns of between 50,000 and 150,000 tonnes at either its Lake Johnston or Edna May facilities, giving it a potential early revenue stream and a way to maximise the use of its substantial infrastructure.
In a suite of moves designed to underpin restart activities, the company has also secured several key operational and supply chain agreements. Forrestania says it has inked a five-year deal with Orica for the long-term supply of sodium cyanide to its Lake Johnston facility, starting in 2027, and a framework agreement with SGS Australia for laboratory services across both its hubs. The company has also established an additional haulage agreement with Campbell Gold Haulage for its ore transport logistics across the Southern Cross and Kalgoorlie regions.
To get the 2.8-million-tonne-per-annum (Mtpa) Edna May processing plant match-fit for operations, the company says it has ordered key long-lead items, including replacement SAG and ball mill liners, scheduled for delivery in November this year.
Forrestania Resources executive chairman David Geraghty said: "We’re continuing to make significant strides following the acquisition of the Edna May Gold Mine. Across our business we are securing the critical ingredients required for successful operations, including ore supply opportunities, laboratory capability, haulage capacity, reagent supply arrangements, mill liners and processing consumables ."
The company’s strategy centres on its two processing hubs, which it is developing into a scalable platform for regional consolidation. Refurbishment of the Lake Johnston mill is expected to be completed by year-end, while the Edna May facility is slated for completion in 2027.
The recent operational progress follows the company’s transformative acquisition of the Edna May gold mine, which catapulted its global mineral resource estimate to a hefty 58.6 million tonnes grading 1.1 grams per tonne gold for 2.08 million ounces. The Edna May deal alone contributed a JORC-compliant resource of 30.7 million tonnes at 1.0 g/t gold for 945,000 ounces.
With the keys to an established gold mine and processing plant and a global resource inventory north of two million ounces, Forrestania appears to be cementing its foothold in the prolific Southern Cross-Kalgoorlie gold district.
The hard work of turning a discovery into a mine happens long before the first ounce is poured. By securing critical supply chains and an ore purchase agreement, Forrestania appears to be laying the foundations for its next chapter as a gold producer.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Andrew Todd
