Resource Mining, Intermin in gold project

Contractor Resource Mining Corporation has inked an agreement to co-fund Intermin Resources’ Teal project to production, with the mine to cost an estimated $4.5 million.

Resource will fund 50 per cent or 100 per cent of development through to production, with the two companies then to share free cash flow at a 25 per cent or 50 per cent rate after Intermin recovers its discovery cost of $2.1 million.

Negotiations are continuing for a third party mill for the ore, with the mine located near Kalgoorlie.

Intermin managing director Jonathan Price said the company was rapidly progressing toward mine development of Teal, with the alliance announced today a key milestone in the process. 

“We look forward to working with Resource Mining who not only brings specialised mining capability but is assisting in financing the project for the benefit of both our businesses,” he said.

“Alliances such as these on a shared risk and shared reward basis is a model that works well as we develop our production pipeline.”

Resource will be responsible for all mining activities, including establishment, dewatering, haul road construction and rehabilitation, while Intermin management will supervise.

It comes two weeks after the company announced positive feasibility study results, with more than 15,000 ounces to be produced over nine months.

That analysis found an all in cash cost of $953/oz at a time when gold prices are surging to record highs in Australian dollar terms late last month, around $1,826/oz.

A final decision for development of the mine is expected before the end of this quarter.

In April, Intermin signed an agreement with La Mancha Resources, with the latter to pick up 70 per cent of the Binduli gold project, excluding the Teal and Peyes deposits.

Intermin was down 4 per cent to 12 cents per share at the time of writing.