Special Report: Laneway Resources is gearing up for another mining campaign at its 100%-owned Agate Creek gold project in north Queensland and the timing couldn’t be much better.
Laneway (ASX: LNY), which is chaired by prominent Brisbane-based dealmaker Stephen Bizzell, advised on Tuesday it expected to start mining ore from the high-grade Sherwood deposit at Agate Creek in August.
Processing would commence shortly thereafter subject to the finalisation of a toll treatment agreement with one of several third parties operating conventional carbon-in-leach (CIL) mills in the district.
Sherwood’s high-grade Mineral Resource of 205,000 tonnes at 5.5 g/t gold will provide the basis for the campaign.
“Laneway anticipates material positive cashflow from the mining activities at Agate Creek aided by current high prices for AUD denominated gold,” the company said on Tuesday.
An initial campaign of mining at Agate Creek under Laneway’s ownership took place from April to September last year, with ore treated through Maroon Gold’s nearby Black Jack facility.
Under the tribute agreement, Maroon Gold covered all costs and received a share of the gold produced as reimbursement. Laneway’s share of 5,242 ounces delivered approximately $10.6 million in revenue.
The Australian dollar gold price – at $2580 an ounce – is now about $400 an ounce higher than it was during the last campaign.
Expansion of the current Sherwood open pit through the completion of a small cutback is now in progress.
This will allow access to ore left behind from last year’s mining campaign as well as a new ore shoot intersected in drilling late last year.
The current mining of waste will also help make way for a program of reverse circulation (RC) drilling on the exposed bench in July once waste has been removed.
This drilling program has been designed with the intention of increasing high-grade ore to be mined this year to more than 30,000 tonnes.
The broader Agate Creek project contains an overall Mineral Resource of 471,000 ounces, which Laneway hopes to develop in the medium-term, including with onsite processing facilities.
The cashflow from the upcoming mining campaign will aid in conducting additional exploration and appraisal at Agate Creek as well as progressing the mining lease application for the company’s Ashford Coking Coal Project in New South Wales, continuing exploration at its New Zealand gold projects and potentially following up other project opportunities.