Mutiny Gold says it is deep in negotiations with a local iron ore producer to commercialise iron ore deposits at its Gullewa project in the Murchison.
Mutiny said the discussions, if they lead to a suitable agreement could potentially generate cash flow within the next six to eight months from the Gullewa project.
The identity of the iron ore producer was not disclosed.
The miner said it was also in discussions with a mining contractor to develop the Rocksteady direct shipping ore asset at Gullewa in a joint venture partnership.
Mutiny said the contractor, which it declined to name, would supply mining equipment and start-up funding if a partnership is reached.
Earnings from any potential agreements would be used to fund further development of Mutiny’s flagship gold mine, Deflector.
“A Rocksteady development has always been one of our key, early stage development options at Gullewa and right now a ‘window of opportunity’ has opened up for Mutiny and we intend taking advantage of it,” managing director John Greeve said.
Also today, Mutiny said it was seeking alternative development funding opportunities for its Deflector deposit because the murky gold market was making it difficult to source a package that would retain shareholder and project value.
“While we, and our financial advisers, strongly believe that Deflector’s credentials put it at the leading edge for development proposals of its size in Australia, the fact is that for every step forward we have made in concluding a finance package, we have been pushed back just as much by market developments out of our control,” Mr Greeve said.
“While we are continuing to maintain Deflector financing discussions with a number of banks, it will no longer be our sole focus for funding future developments. “
Mutiny said it would seek to develop the Deflector project’s processing plant in partnership with a local mining construction company.
At close of trade today, Mutiny shares were down 7 per cent, at 2.6 cents.