Calidus Resources Limited (ASX:CAI)) has signed a binding framework agreement which gives it an exclusive right to negotiate binding agreements for access to all Haoma’s gold tenements, deposits and stockpiles across the East Pilbara on the basis of a 60:40 profit share,
Over many years, Haoma has secured a large number of historic mines in the region and has mined many of these deposits. Although Haoma has access to the Bamboo Creek Mill, its small size (100,000tpa) results in very high processing costs.
Calidus’ Warrawoona gold project is now performing 20% above design capacity with low operating costs. This allows for many of the Haoma stockpiles and deposits that were considered to be uneconomic to be treated at Warrawoona for the benefit of both parties.
“This agreement is aimed at leveraging the existing infrastructure we have at Warrawoona for the benefit of both Calidus and Haoma,” Calidus Managing Director, Dave Reeves, said.
“These stockpiles and deposits have immense potential to grow the cashflow, mine life and production rates at Warrawoona, unlocking their value in the process.
“With stockpiled ore sitting less than 25km from Warrawoona, high-grade deposits that have not been drilled for over 30 years and the increased capacity of our mill, the opportunity is substantial.”
Deposits
Although many of the deposits have been previously mined, there are no JORC 2012 Resources. As such, Calidus will undertake required works to bring these to JORC 2012 reporting standard and will update the market as this occurs. The deposits are significant and provide a compelling near-term exploration target. An example of some off the deposits covered by the JV include:
Bamboo Creek
Bamboo Creek is located 55km from Warrawoona to the north of the Mt Edgar Batholith. Bamboo Creek was initially mined in the late 1800’s and saw a modern 100,000tpa mill introduced in 1985. Total production from the field of approximately 200,000oz at approximately 8.0g/t has been recorded over the projects history. Mining operations ceased in 1995 and very limited exploration has occurred since. This represents the priority area for Calidus to investigate.
North Pole
The Normay and Mickeys Finds deposits have both seen limited mining in the last 40 years. Extensive drilling at Mickeys Find has led to several non-JORC 2012 Resources and Normay underground operations were shut when Bamboo Creek closed although the deposit remained open with a high grade non-JORC 2012 Resource remaining.
Blue Bar
Blue Bar is located 22km from Warrawoona. It is a small historic mine but has been drilled with high grade results received. The mine has various untreated ROM stockpiles on an existing Mining Lease.
Stockpiles
In excess of 1.5Mt of stockpiles are contained on Haoma ground. The stockpiles require further sampling to be reportable under the JORC code and Calidus will commence this work immediately. Stockpiles include ROM ore and low-grade dumps from previous operations such as the Prophecy-Perseverance Mine at Bamboo Creek. Prophecy-Perseverance utilized a had a 4.0g/t lower cut off grade to enable the 12g/t feed grade produced from the mine and the low grade stockpile is estimated to contain 1Mt of broken stocks.
Material terms
The framework agreement provides binding terms and conditions on which Haoma grants Calidus the exclusive right over a two year period to undertake due diligence and negotiate binding terms and conditions of definitive agreements for the mining, extraction, processing, transportation and sale of gold from the East Pilbara Assets.
The framework agreement sets out the key terms which are intended to form the basis of the binding terms for the Proposed Transaction, in particular:
• a profit share in respect of the relevant East Pilbara Assets of 60% (Calidus) and 40% (Haoma); and
• the respective operational contributions of Calidus and Haoma, namely:
– Calidus is to manage the mining, extraction, processing, transportation and sale of gold, obtain required regulatory approvals and provide access to its existing infrastructure; and
– Haoma is to provide a licence to access the relevant East Pilbara assets and utilize the mining information.
For further information please visit: https://www.calidus.com.au/
