Brightstar Resources Ltd (ASX:BTR) is set to restart mining operations at the Menzies Gold Project in WA, which includes the high-grade gold field which has historically produced 787,200 ounces at 18.9 g/t gold from intermittent production between 1895 and 1995.
The company is on track to become Australia’s next gold producer and has scheduled site mobilisation of personnel and equipment supplied by joint venture partner BML Ventures Pty Ltd for late July.
All going smoothly, the first material movement will take place in August for mining of 30,000 tonnes of ore at a head grade of +6.0g/t from within the Selkirk Open Pit mine.
Brightstar has timed its run well, with the current gold price of around $2,850 per ounce, suggesting a favourable pricing environment to deliver strong potential margins.
Shares increase
Progress toward mining and the strong gold market fundamentals have seen the company's shares increase by 30% today to $0.013.
The company expects to see cashflow in the first quarter of 2024 from processing allocation at St Barbara Ltd (ASX:SBM)’s Gwalia Processing Plant in early 2024.
It is also assessing opportunities for additional near-term mining at Menzies, including the Stirling and Pericles deposits which contain 45,000 ounces at 5.2 g/t close to surface.
BML Ventures Pty Ltd operations (May 2023).
Milestones met
Brightstar has met its key milestones following its merger with Kingwest Resources Ltd via a Scheme of Arrangement which saw the strategic consolidation of Kingwest’s Menzies Gold Project and Brightstar’s Laverton Gold Project in May this year.
The milestones include a recent site visit and toll milling arrangement with St Barbara executed for the Selkirk joint venture.
Infill drilling completed at Selkirk in the second half of 2022 returned strong results including:
- 6 metres at 24.62 g/t gold from 92 metres;
- 3 metres at 14.68 g/t from 47 metres;
- 2 metres at 12.55 g/t from 32 metres;
- 2 metres at 13.44 g/t from 55 metres;
- 7 metres at 24.8 g/t from 43 metres;
- 6 metres at 20.0 g/t from 41 metres; and
- 2 metres at 12.9 g/t from 42 metres.
Ore haulage and processing at Gwalia is scheduled for Q1 CY24, with BML responsible for all capital, mining and haulage costs with profits split on an even (50:50) basis upon reconciliation of gold sales and project costs.
Becoming Australia’s next producer
In summing up the developments of the past few months and what is to come, Brightstar’s managing director Alex Rovira said, “We are excited for Brightstar to become Australia’s next gold producer via our mining JV with BML.
“The Selkirk open pit is the first production opportunity for Brightstar with a significant portfolio of advanced-stage gold resources in the development pipeline in Menzies and Laverton.
“This mining JV with BML signifies the first production for Brightstar that will generate meaningful free cash for the company to organically fund additional exploration and development efforts underway across the broader portfolio, which contains 965,000 ounces of gold JORC mineral resources.
“The mineral resources contained within Brightstar’s Menzies Gold Project presents a significant opportunity for Brightstar to extract value which will assist to fund larger-scale development endeavours underway to create a genuine WA gold developer with meaningful scale through Brightstar’s existing processing infrastructure and robust resource base in WA’s Goldfields region.”
What’s next?
Brightstar and BML will begin development and mobilise and conduct earthmoving activities in the near future.
The company will also continue resource definition and extensional drilling to enhance the existing resource base at the Laverton and Menzies gold projects.