Orminex pours first gold at Comet Vale

Orminex (ASX: ONX) has announced a first gold pour of 202 ounces from its 51%-owned Comet Vale project in Western Australia’s goldfields region.

The milestone comes less than four months after the $87 million market cap company listed on the Australian Stock Exchange and just three months after it fast-tracked the commencement of operations at Comet Vale.

The project is believed to host a JORC-compliant indicated and inferred mineral resource of 750,000 tonnes at 8.4 grams per tonne for a contained 203,100oz of gold.

Orminex executive chairman Daryl Henthorn said the first pour proves the efficacy of its new Minerals Venture contract model governing development at Comet Vale, agreed in January between Orminex and underground mining contractor GBF Mining.

Under the terms of the contract, Orminex will leverage GBF’s expertise and equipment in return for GBF’s profit share in the project.

Addressing obstacles to production

According to Orminex, many Australian gold projects struggle due to challenges associated with financing and operational expertise, including low-grade gold inventory requiring a substantial resource base and capital to develop; high costs of definition and feasibility study work; and inability to attract funding due to project economics or company size.

Orminex recognised a market opportunity to offer a contract model which could successfully bring Comet Vale into production by taking into account these known obstacles.

The strategic partnership formed with GBF allows Orminex to utilise the company’s underground expertise and gives GBF a major stake in the project.

GBF offers “latent incremental capacity” such as capital, human resources, extensive management and operating systems and support and underground mining equipment which can be used for the Mineral Ventures model at a largely variable cost basis.

In consideration for providing project owner funding and mining services for the model, GBF has negotiated a mine management contract and equity and/or profit share interest in the project.

“Comet Vale has demonstrated how this [Minerals Venture] model can unlock value in the gold sector [when a company has] access to capital and mining services,” Mr Henthorn said.

In May, Orminex confirmed it had secured Wyllie Group as a cornerstone investor, with a 6% stake in the company.

At mid-afternoon, shares in Orminex were trading 12.50% higher at $0.180.