Mining and exploration company Laneway Resources (ASX: LNY) has confirmed progress is being made towards recommencing operations at the high-grade Sherwood deposit within its wholly-owned Agate Creek gold project in north Queensland.
The company is targeting a mining restart in August with ore transport and processing expected shortly after, pursuant to a toll treatment agreement through a third-party carbon-in-leach processing plant.
Initial work on a 39-hole reverse circulation drilling plan over 2,000m (known as phase one) has been completed and mining of waste material is underway to allow for expansion of the existing open cut pit (cutback) to access ore left behind during a 2019 mining campaign.
Phase one will aim to confirm a separate deeper zone of mineralisation and follow up an intersection of 6m at 4.71 grams per tonne including 2m at 30g/t from 61m identified in previous drilling.
Laneway said the results may potentially be included in the next mining phase and add extra ore tonnes without significantly increasing the stripping ratio of waste material required to be mined.
Phase two of mining at Sherwood will be carried out after Laneway has evaluated phase one results, updated pit designs and finalised mining contractor, ore transportation and toll treatment agreements for third-party offsite processing.
Long-term development
Other activities are also being progressed with a view towards longer-term, large-scale development of the project.
Infrastructure upgrades, monitoring, modelling and procedures have been implemented to allow for the collection of baseline environmental data and studies, which will be utilised as part of the expansion of onsite activities.
Since the outbreak of the COVID-19 pandemic, onsite activities have experienced some delays to allow for the implementation of revised work practices and the upgrade of accommodation and other facilities to ensure safe work practices.
Positive cash flow
Laneway said it expects “significant positive cash flow” from this next stage of mining to provide a sound financial platform to advance its asset suite.
Activities will include additional exploration and appraisal of the broader Agate Creek project area, progressing a mining lease application for the Ashford coking coal project in northern New South Wales and exploration of the company’s gold assets in New Zealand.
At mid-afternoon, shares in Laneway Resources were trading 20% higher at $0.006.
Get the wire before the market opens.
The ASX small-cap stories that matter, filed before 9am AEST. Curated by the Small Caps desk.