VTX has bought itself a high-performance processing plant to speed up production and lower costs at the Reward gold mine. Pic via Getty Images
Vertex Minerals to send Reward gold mine into overdrive with new processing plant
Mining
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- Low-cap gold miner Vertex Minerals makes production upgrade with smart processing plant purchase
- The Gekko gold gravity plant is expected to dramatically reduce costs and pull forward prior production targets
- A share placement capital raise is being put together to cover the purchase, and more
Special Report: Low-cap goldie with big-cap ambitions, Vertex Minerals, is acquiring a processing plant which is expected to send its high-grade Reward gold mine into cost-efficient overdrive.
Vertex Minerals (ASX:VTX) announced today it has secured a Gekko gold gravity processing plant. These are renowned for their low-energy mining capacity, smart design and high-tech capabilities.
The easily transportable plant – which is currently located at the Morningstar gold mine in Victoria – is a modular design and will be deployed at the company’s Hill End gold project in NSW, specifically at its flagship Reward mine.
That’s a production home to an extremely high-grade resource of 419,000t @ 16.72 g/t – or 225,200oz of contained gold – with a higher confidence indicated resource of 141,000t @ 15.54 g/t, or 70,500oz of contained gold.
VTX owns 24km of contiguous tenements along the Hill End gold system in NSW’s famous Lachlan Fold Belt, and just 60km from Australia’s largest gold mine, Cadia.
The company believes Reward is well placed for a simple start-up, with the existing gravity processing plant located adjacent to the underground mine access point.
And the expectation for the modular Gekko processing plant is that it will slot straight into the existing mining set-up with relative ease, helping to significantly reduce the time required to develop the project and bring gold production forward by up to five months.
Placement raise to cover plant acquisition
VTX has forked out $620,000 plus GST for the Gekko processing plant, which it aims to cover via a placement – via up to 10m new fully paid ordinary shares – to raise $800,000 before costs.
PS Capital has been appointed as lead manager for the placement.
The company says the acquisition of the plant is expected to reduce the project’s capital expenditure by about $4m.
And, the reason the infrastructure addition is anticipated to increase gold production so significantly is because the Gekko plant reportedly has considerably higher throughput capacity relative to the existing plant at Hill End – and greater potential to be upgraded even further.
The company notes, too, that the plant is “ideally suited to the free milling, high-grade Reward ore”.
Higher throughput, lower capex. It’s a no-brainer purchase that ought to increase production and improve the economics at Hill End.
Some other specific advantages of the acquisition, notes VTX, include:
“Just two operators required, which also keeps costs down; can be monitored remotely; density, mass flows and sampling monitoring; rigid gold security and strong safety features; lower power usage and more.”
A ‘transformational’ year ahead
Along with share placement capital raising (subject to shareholder approvals), the installation of the processing plant is now high priority for the company.
VTX notes the existing mine development extends right into the resource and only some stripping and refurbishment of the access is required, with “a second means of egress” already in place along with some underground fleet and utility services.
“This is an opportunistic purchase for Vertex, given we were planning to build a similar but new gravity gold plant for processing the high-grade Reward ore this year, as set out in our recently published PFS,” VTX executive chairman Roger Jackson says.
“This acquisition will save us at least $4m and get us producing gold bars up to five months earlier.
“The plant will be ready for feeding during the development of the Reward underground mine, so we can treat our stockpiled material to provide early cash flows.
“This will be a transformational year for Vertex.”
This article was developed in collaboration with Vertex Minerals, 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.
