Laneway steps into gold production fast track

Laneway Resources has stepped up the pace at its high-grade Agate Creek gold project while also being poised to benefit from the IPO of First Tin at a time of record prices for the commodity.

The company has reported the restart of mining at Agate Creek, with above budget mining rates achieved. An initial 35kt ore parcel grading 5 grams of gold per tonne (g/t) is now ready to be mined after waste material was removed to expose the main ore zone.

Other highlights in Laneway’s (ASX:LNY) latest Quarterly Activities Report include details of further drilling planned to confirm the hypothesis of game-changing Kidston-style potential at the project.

The follow-up drilling comes after a 12-month study, with input from some of Australia’s best independent geological experts, which showed significant similarities to an intrusion-related gold system (IRGS).

These systems support major gold mines such as the former Kidston mine. Only 60km from Agate Creek in North Queensland, Kidston was once Australia’s largest open cut gold mine, producing more than 3.4 million ounces of gold and silver.

Initial results from the first phase of IRGS interpretation drilling have been encouraging, with grades as high as 33.9g/t close to surface and 14m at 5.84g/t.

Meanwhile advanced negotiations are continuing for the purchase of a gold processing plant and associated exploration and mining leases close to the North Queensland mine.

The Steve Bizzell chaired company expects to complete the purchase this quarter, with processing of ore from Agate Creek to start shortly afterwards.

Acquisition would significantly cut Laneway’s costs, reducing by 700km the distance required to transport ore, while providing a major boost to Laneway’s cashflow.

At the same time planning and approvals processes continue to advance as Laneway focuses on transforming into a consistent gold producer.

Highlights from other areas of Laneway’s portfolio include details of its 20% acquisition of Aus Tin Mining (ASX:ANW) – a result of Laneway divesting an initial 40% interest in Ashford Coking Coal. Via its interest in Aus Tin, Laneway is set to benefit from the IPO of First Tin on the London Stock Exchange main board.

In other corporate news, a further $5.5 million in capital raising initiatives have been announced and are likely to be completed in the current quarter. This follows a $1.9m capital raise being completed on December 31, with those funds being used to help cover current mining activities, further exploration and short-term borrowings.

Laneway CEO and Managing Director Brad Gordon said it had been a big quarter of progress for the company and a real step change in the tempo of activity across its portfolio.

“The recommencement of mining at Agate Creek was a key development and processing of the high grade ore parcel in coming months is expected to yield material cash flow,” Gordon said.

“The potential for a dramatic change in the market’s appreciation of the Agate Creek Gold Project looms, as the combination of the impact of the recently completed Multi-Element Study and current exploration drilling as well as the potential acquisition could dramatically transform the scale and economics of Agate Creek.

“Elsewhere, Laneway is free carried through an extensive pending work program at the Ashford Coking Coal Project and the Aus Tin / First Tin transaction highlights the latent value in our portfolio often overlooked by the market. In an environment of record tin prices, the pending IPO of First Tin, in which Laneway has a material exposure via our 20% shareholding in Aus Tin, has exciting potential.”

This article was developed in collaboration with Laneway 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.