GBM Resources ready to deliver first customer shipment of copper
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Copper and gold company GBM Resources is expecting to deliver its first customer shipment of copper concentrate in April from its White Dam joint venture.
The delivery will mark a significant milestone for GBM Resources (ASX:GBZ) which has earned a 50 per cent production interest in the White Dam project in South Australia.
The earned interest came through the construction of a SART (sulphidisation, acidification, recycling and thickening) plant to extract copper from a gold leach solution at White Dam.
The SART plant has improved gold recovery while lowering cyanidation costs at the project, and it has operated above expectations with less cyanide usage.
“GBM is particularly pleased with the performance of the White Dam joint venture operation and the efforts of team on site,” managing director and chief executive, Peter Rohner, said.
GBM Resources has the option to acquire a 100 per cent interest in the assets of the White Dam project from its joint venture partner Round Oak Minerals Proprietary Limited.
The exercise price for the option which expires in June is $500,000 and replacement of $1.9m environmental bonds and would give GBM Resources a 100 per cent interest in the project, gold plant, mining leases and other tenements.
“In conjunction with study work on the Vertigo deposit, we are looking forward to making a decision with respect to our option to purchase 100 per cent of the project and its assets by May 2021,” Rohner said.
The Vertigo deposit is located to the south-west of the White Dam project in South Australia.
Further drilling is to start at the Vertigo deposit for gold in April.
Since its start in July last year, the White Dam joint venture has produced 1,007 ounces of gold together with approximately 70 tonnes of copper in copper concentrate.
Gold sales revenue for the joint venture to March 28 is ~$2.4m, and the company is expected to achieve sales of between 550 and 650 ounces of gold in the June quarter.
Operating costs for the joint venture are stable and averaged $250,000 per month.
The joint venture is currently finalising terms with a smelter customer for its first delivery of copper concentrate from the White Dam project which is expected to arrive in April.
“With the White Dam joint venture now being self-funding and producing meaningful positive free cashflow at current gold and copper prices, GBM is in the attractive position of having a further source of cashflow to drive its gold development strategy in the Drummond basin, centred around the flagship Mt Coolon/Yandan projects,” said Rohner.
This article was developed in collaboration with GBM Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.