Empire Resources looks to cut road haulage costs on maiden gold production

It may have only just entered production but gold mining group Empire Resources (ASX: ERL) is already looking to increase the efficiency of its Penny’s Find mine more.

Empire Managing Director, Mr David Sargeant, today announced that the group had entered into a Memorandum of Understanding (MOU) with Poseidon Nickel (ASX: POS), to evaluate the option of using check out the feasibility of using its Black Swan mill to process Penny’s Find ore.

At the moment, the ore is being trucked to the Lakewood toll milling facility, on the outskirts of Kalgoorlie, and to Maximus Resources’ Burbanks toll milling facility at Coolgardie.

Lakewood involves road haulage of 63 kilometres and Burbanks 105 kilometres, making the Black Swan mill at just 48 kilometres by road a much more efficient and less costly option.

Mr Sargeant said access roads to Black Swan were in great condition and currently permitted for quad road trains.

“The opportunity to access a toll treatment facility considerably closer than those currently being utilised would result in a considerable saving on haulage costs for the Penny’s Find project,’’ Mr Sargeant explained.

“We welcome the opportunity to conduct due diligence on the Black Swan Operations’ facility which would provide us with a nearby treatment option in addition to the Kalgoorlie and Coolgardie mills.”

Poseidon Chief Operating Officer Michael Rodriguez welcomed the MOU.

“Since announcing the Company’s plans to establish the Black Swan Operations as a central gold processing facility, a number of third party gold explorers and miners have expressed an interest in securing capacity at the facility,’’ said Mr Rodriguez.

“Poseidon welcomes the opportunity to engage with third parties to ensure the facility is operated at optimum throughput.”

Empire Resources has been very active recently, entering production with high grade ore from the Penny’s Find open pit and simultaneously performing underground exploration as part of a feasibility study into developing an underground mine.