Stavely Minerals (ASX: SVY) has entered an agreement to snap up the 350,000 tonne per annum Beaconsfield gold processing plant in Tasmania.
The move is part of the company’s strategy to pursue high-grade gold deposits in the state.
As part of the agreement, Stavely will secure the plant’s associated infrastructure, property, rights and mining lease within Tasmania’s prolific high-grade Mathinna goldfield.
According to Stavely, historic production within the goldfield had been up to 320,000 ounces of gold. However, the area has had little modern exploration.
Despite the lack of modern exploration, Stavely stated it was “extremely optimistic” for the high-grade gold potential in the region due to its historic production.
“Acquiring an established gold processing plant for the faction of the cost to build and a permit a new one – not to mention the potential lead time associated with permitting a new facility in Tasmania – is an exciting opportunity, which provides our shareholders with exposure to the potential development of a high-grade gold business on Australia’s east coast,” Stavely executive chairman Chris Cairns said.
“We have seen high-grade gold assets deliver significant value for investors at projects like Fosterville in Victoria and Bellevue in Western Australia, and we believe there is a genuine opportunity to create a quality gold asset in Tasmania.”
He added that although the company’s focus remains on discovering a giant copper-gold target in western Victoria, the opportunity to secure the high-grade Tasmanian asset was “simply too compelling to resist”.
“This will not be a distraction from our laser-like focus on our copper-gold porphyry opportunities in western Victoria, but I am confident we can, at the same time, add significant value by demonstrating the high-grade gold potential of a rich goldfield, which produced around 300,000oz historically, but has been largely untouched since the 1930s in combination with an established gold processing facility located nearby.”
Beaconsfield gold processing facility
The acquisition terms involve Stavely paying a $250,000 deposit and the remaining balance of $1.75 million within 90-days of execution.
Stavely is also responsible for providing a $500,000 environmental bond on transfer of the mining lease to the company.
Como Engineers was commissioned to provide a report on the plant’s condition and refurbishment costs, which have been estimated at $9.24 million.
The fee includes a $1.54 million contingency, with the upgrade and refurbishment to develop a high-grade free-million gold ore capabilities.
For an additional $5 million the plant can be configured to process both refractory and free-milling gold ore offering flexibility in treating various ore-types from the region.
Stavely noted it has “no intention whatsoever” of reopening the underground mine at Beaconsfield which encountered seismic activity at depths of 700m and beyond and triggered an underground rock fall that led to death of one miner and trapped two miners for over two weeks in 2006.
Instead, Stavely intends to test the shallow exploration potential at the mining lease.
By midday, Stavely’s share price had risen almost 8% to $0.34.