Brightstar Resources is primed to join the ranks of Western Australian gold producers, with mining set to begin in August at its Selkirk open-pit gold mine that holds 30,000 tonnes of ore going more than 6 grams per tonne gold.
Brightstar picked up the operation that forms part of the Menzies gold project after completing its successful merger with Kingwest Resources last month.
In July last year, Kingwest announced it had signed an agreement with Kalgoorlie-Boulder company BML Ventures for open-pit and underground mining at the Selkirk deposit. Just a year on and mobilisation is planned for late next month, with first material movement scheduled for August.
Brightstar says with key milestones met, including a recent site visit and a toll milling arrangement with St Barbara executed for the Selkirk joint venture (JV), the project scope has now been agreed between the JV parties to pave the way for mobilisation and mining commencement.
Utilising a conventional 100-tonne class mining fleet typical of the WA Goldfields, ore haulage and processing at Gwalia is scheduled for the first quarter of next year. BML will be responsible for all capital, mining and haulage costs, with profits split on an even basis upon reconciliation of gold sales and project costs.
Brightstar also plans to assess opportunities for additional near-term mining at Menzies, including the near-surface Stirling and Pericles deposits.
Brightstar Resources managing director Alex Rovira said: “This mining JV with BML signifies the first production for Brightstar that will generate meaningful free cash for the Company to organically fund additional exploration and development efforts underway across the broader portfolio, which contains 965,000oz Au JORC Mineral Resources.”
Kingwest returned some impressive results from infill drilling at Selkirk prior to last year’s merger, including a 6m hit at 24.62g/t gold from 92m and 7m grading 24.8g/t from 43m. Additional high-grade assays showed 6m reading 20g/t gold from 41m, a 3m intercept at 14.68g/t gold from 47m and 2m going 12.55g/t gold from just 32m.
The merger brought the combined assets of the two companies in WA’s renowned Goldfields region to 21 million tonnes going 1.5g/t gold for a total of 965,000 ounces. The total includes Kingwest’s Menzies gold project that hosts a mineral resource of 11.7 million tonnes at 1.33g/t for 505,000 ounces and Brightstar’s Alpha, Cork Tree Hill and Beta deposits that combine for 8.9 million tonnes at 1.6g/t for 460,000 ounces.
Brightstar says the current gold price provides a favourable economic environment to deliver strong potential margins and expects cashflow from processing to start rolling in early next year.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Michael Philipps
