- Laneway Resources (LNY) has completed the first blast at the high-grade Sherwood open pit mine in northern Queensland
- The company will dig around 9,000 ounces of gold in two stages from Sherwood, with the initial 18,000 tonnes of ore to be toll processed for quick cash flow
- The funds will be used to continue exploration and development work across the wider Agate Creek project, with a view to building on-site processing facilities
- Studies are underway for the environmental approvals required for mining at the 22,000-ounce Whittle open pit, with production aimed to begin in 2021
- Agate Creek already has a global mineral resource of 471,000 ounces of gold, with further exploration upside
- Laneway Resources is trading 14.28 per cent higher for 0.8 cents
Laneway Resources (LNY) has completed the first blast at the high-grade Sherwood open pit mine in northern Queensland.
Bang for buck
The first blast exposed the first ore, with mining to commence immediately. Laneway will dig around 9000 ounces of gold in two stages from the Sherwood open pit.
The company will mine a total 43,000 tonnes of ore at around 6.5 grams per tonne (g/t).
An initial 18,000 tonnes will be toll processed at the nearby Lorena Gold Mine carbon-in-leach processing plant.
Ores will be processed at a fixed price per tonne over a three-week period starting around mid-November, with gold recoveries forecast at around 90 per cent.
Transportation of the first ores should start in the next fortnight. The remaining 25,000 tonnes will be stockpiled for transporting and processing post-wet season.
Laneway's plan is to kickstart cash flow in the near-term to help fund its corporate objectives, including ongoing exploration across the Agate Creek Project, without the need of dilutive capital raising.
Laneway Chairman Steve Bizzell says the company is looking to get things moving at Agate Creek.
"The processing deal we have struck with Lorena enables payment by year end for the majority of the gold produced during this campaign," Steve said.
"This sets the company upwell for a busy 2021 as we focus in parallel on the planning, approvals and development of the larger volume of high-grade ore encompassed by the larger Whittle pit shell and then turn our attention to options for onsite processing of the almost half a million ounces identified at Agate Creek," he added.
The next steps
Laneway will look at other processing options for the high-grade ore from Agate Creek, including for the second batch of ore from the current mining campaign.
With the early cash flow from the first ores expected by the end of the year, the company will be funded to explore other processing and mining options to reduce costs and generate further cash flow.
Pit optimisation for the Whittle deposit projects a much larger open pit shell containing 120,000 tonnes of ore at 5.7 g/t for 22,000 ounces of gold.
Studies are underway to facilitate the environmental approvals required for mining at Whittle, with a target to begin production in 2021.
Exploration and evaluation work will continue across the greater Agate Creek project area, with a view to developing large-scale mining activities and on-site processing facilities.
Agate Creek already has a global mineral resource of 471,000 ounces of gold, with further exploration upside.
Laneway Resources is trading 14.28 per cent higher for 0.8 cents at 1:14pm AEDT.