Tombola rents gold plant to bring forward production

Tombola could be producing gold within 12 weeks after reaching an agreement for the short-term rental of a gold processing plant from True North Copper.

This effectively brings forward first gold production from the Golden Mile operations within its Mt Freda complex with first gold production expected withing 12 weeks, whilst concurrently refurbishing the Lorena plant.

Under the binding term sheet, Tombola Gold (ASX:TBA) will fund the cost of refurbishing the Great Australian Gold Production Plant – expected to be up to $500,000 – before leasing it from True North Copper for a six month period at a cost of $110,000 + GST per month.

This can be extended by a further three months by mutual agreement.

“We are pleased to have entered a Binding Term Sheet with True North as a further step in the process of fulfilling our promise to the market of becoming a meaningful gold producer this year,” managing director Bryon Miles said.

“This initiative allows Tombola to continue to optimise its operations to secure a long future of gold processing in the Cloncurry region.”

Gold bullion produced during this rental period will be sold to the Perth Mint.

Near term producer

Tombola had previously mapped out plans to start Golden Mile production in the fourth quarter of this year.

It recently moved to acquire the Lorena mine and its associated 300,000tpa processing facility – located just 30km from Mt Freida – that were placed on care and maintenance in late 2021.

There’s a bit of future proofing involved here as while the plant is primarily a gold CIL processing facility, it also has the capacity to treat copper-bearing ore.

This article was developed in collaboration with Tombola Gold, 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.