Source: Kingwest Resources
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Kingwest Resources (KWR) is set to form joint venture with FMR Investments to recommence gold production at the Menzies gold project in WA
  • Through a term sheet, the joint venture will comprise a 40 per cent KWR, 60 per cent FMR profit share to restart mining at the Yunndaga undeground mine
  • Within one month of signing, FMR will pay KWR $500,000, and a further $500,000 is due one month after first cut in the decline is fired
  • Kingwest says the partnership is the first step in unlocking the commercial potential of the Menzies gold project
  • KWR shares have been trading 18.5 per cent higher at 16 cents

Kingwest Resources (KWR) is set to form a joint venture with FMR Investments to recommence gold production at the Menzies gold project in Western Australia.

The MGP is one of Western Australia’s major historic goldfields which has seen limited modern exploration since its closure over 20 years ago.

The companies have entered into a term sheet to form a 40 per cent KWR, 60 per cent FMR profit share joint venture to recommence underground mining at the Yunndaga deposit within the MGP.

The Yunndaga mine reportedly has multiple high-grade shoots and was last mined underground approximately 85 years ago, with the Princess May Shoot producing 526,000 tonnes at 16 grams gold per tonne for 270,000 ounces.

KWR said the partnership is the first step in unlocking the commercial potential of the Menzies gold project.

The JV will cover 180,000 mined contained gold ounces produced, or five years from the commencement of mining at the underground mine, whichever occurs first.

The parties have agreed to negotiate in good faith with plans to enter a formal agreement by November 30, 2021.

FMR plans to pay KWR a non-refundable payment of $500,000 within one month of signing the agreement, and a further non-refundable payment of $500,000, due one month after first cut in the decline is fired.

Under the JV, FMR is set to cover all capital costs and be responsible for all mining, haulage and processing through its Greenfields Mill in Coolgardie.

Additionally, for due diligence purposes, FMR will complete drilling from surface with commitments to complete this within six months of a signed JV agreement.

KWR will be responsible for the mining proposal, including mine closure plan, and other tenement items such as environmental, bonds, water licensing, waste dump approvals.

If the JV is terminated, KWR will regain full control of the Yunndaga mining zone and its operations.

Shares were trading 18.5 per cent higher at 16 cents at 11:19 am AEDT.

KWR by the numbers
More From The Market Herald

" Southern Hemisphere (ASX:SUH) commences drill program at Llahuin and Colina2

Southern Hemisphere Mining (ASX:SUH) commences diamond drilling at its Llahuin copper-gold moly project and Colina2 gold…

" OzAurum Resources (ASX:OZM) hits shallow paleochannel gold at Mulgabbie North, WA

OzAurum Resources (ASX:OZM) has hit shallow high-grade gold at its Mulgabbie North project near Kalgoorlie in…

" Resource Mining Corporation (ASX:RMI) raises capital for Kabulanywele and seeks to clear debt

Resource Mining Corporation (ASX:RMC) undertakes capital raise to fund exploration at its Kabulanywele Nickel Project in…

" Indiana Resources (ASX:IDA) identifies new drill targets at Central Gawler

Indiana Resources (ASX:IDA) identifies new drill targets at its Central Gawler gold project in South Australia.