Laneway Resources (ASX:LNY) is moving swiftly to take advantage of higher gold prices by bringing its small but high grade gold project at Agate Creek into production in North Queensland.
Sherwood is a part of the Agate Creek project and Laneway has been granted a prized granted mining lease for its 85,000 ounces deposit. Laneway has an agreement with Etheridge, the operator of the Georgetown processing plant, located 100 kilometres to the north to process higher grade ore from Sherwood.
Etheridge Operations acquired the Georgetown plan in 2014 and has funded drilling of the high grade deposit through a shares payment arrangement, showing their confidence in the ability to process the ore to catch higher gold prices.
A proportion of the Agate Creek gold is likely to be recoverable by gravity extraction so the project could become a low cost producer. There is exploration upside as well as a lower grade gold resource.
Which is handy as Etheridge has acquired a further 350,000 tonnes per annum milling capacity through its purchase of the Collingwood hard rock tin plant near Cooktown apart from the 200,000 tonnes per annum capacity, enabling the lower grade ore to be economically processed through the plant.
Now Agate Creek is located due west of the Kidston Gold Mine, which was for a time Australia’s largest single gold producer based on a 1.87g/t gold orebody, providing confidence in the plan at Agate Creek with high prevailing Australian dollar gold prices.
To top it off, Laneway has lined up its targets and locked in refining costs, signing a gold and silver refining and sales agreement to provide a solid basis for future gold-backed financing of organic production growth at Agate Creek.
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