OzAurum Resources Ltd (ASX:OZM) has entered into an agreement with LINE Hydrogen Pty Ltd and BIM Metals Pty Ltd (LHBM), which will fully fund a Heap Leach Feasibility Study for the Mulgabbie North Gold Project.
The study is expected to take up to 12 months to complete and if a decision is made to commence production, LHBM will manage the mining and heap leach operations, with profits being split 50:50 between OzAurum and LHBM after operating and capital costs.
Overseeing the project is Brendan James, a hydrometallurgical engineer with over 25 years of experience in heap leach mining. Through BIM, James has successfully developed and optimised similar operations across Australia, including in Queensland, South Australia, and Western Australia.
The agreement includes a break fee of A$4 million if either party chooses to withdraw, excluding technical or permitting issues that could prevent the project from proceeding. If the feasibility study’s economic results are favourable, LINE Hydrogen intends to produce Net Zero Gold from the project, aligning with its goal of developing commercial-scale green hydrogen to replace diesel fuel in Australia.
The Mulgabbie North project has a strong resource base, boasting 260,000 ounces of gold, with 64% in the Measured and Indicated category after 80,000 metres of drilling by OzAurum. The project is strategically located 135 kilometres northeast of the Kalgoorlie-Boulder mining hub in Western Australia.
Two promising new cross fault target zones have been identified, offering further exploration potential.
- Cross Fault 1 Target (NYSE:TGT) *MNORC 129 10 metres @ 1.36 g/t gold from 100 metres including 1 metre @ 6.38 g/t gold
- Cross Fault 3 Target *MNORC 180 11 metres @ 1.90 g/t from 49 metres including 1 metre @ 12.15 g/t gold
Mulgabbie North Gold Project and new targets.
The agreement comes at a time when gold prices are at record highs, with the price standing at US$2,577 per ounce or A$3,844.
“I am very excited that Brendan James from LHBM has selected the Mulgabbie North Gold Project to fully fund the feasibility study and, if the feasibility study economics are acceptable, to obtain funding and operate a potential future heap leach mining operation at Mulgabbie North,” OZM CEO and MD Andrew Pumphrey said.
“Brendan brings a wealth of experience to the table in design, construction and operation of heap leach projects in Australia and overseas which helps in derisking the project for OZM shareholders.
“The White Dam heap leach in South Australia is an example of a highly successful gold operation that Brendan ran for a number of years. Coupled with his ambition to produce Net Zero Gold we are all excited to see the Mulgabbie North Project move forward and, potentially into gold production.
"As well we have identified new cross fault targets from the seismic interpretation the company undertook a while back and I am keen to see us drilling these new areas to see what we can discover.”
Feasibility study to be completed in 12 months
OZM’s wholly owned subsidiary, OzAurum Mines Pty Ltd, which holds the Mulgabbie North Gold Project (MNGP) tenements, has entered into an agreement with LINE Hydrogen Pty Ltd and BIM Metals Pty Ltd.
LINE Hydrogen and BIM Metals will collaborate to provide mining and technical expertise respectively to conduct a feasibility study on the heap leach mining and processing of the MNGP.
The agreement has the following stipulations:
About Mulgabbie North
OZM’s Mulgabbie North Gold Project is 135 kilometres northeast of Kalgoorlie, Western Australia, in the Eastern Goldfields, a significant gold-producing region within the Archaean Yilgarn Craton.
The project area comprises 100% OzAurum-owned tenure, including Mining Lease M28/240 and various Miscellaneous Licences. It's 3.5 kilometres east of Northern Star’s Carosue Dam operation.
The Mulgabbie North Mineral Resource Estimate (MRE) stands at 11.6 million tonnes, grading 0.70 g/t of gold, equating to some 260,000 ounces of gold. This estimate was reported with a 0.3 g/t gold cut-off. Of the total resource, 64% is classified as measured and indicated, supporting the ongoing heap leach study at the site. To date, around 80,000 metres of drilling has been completed, with metallurgical test work achieving gold recovery rates of up to 88.9% through intermittent bottle rolls (IBR).
The heap leach process, targeted at the oxide and transition resource components, involves crushing, agglomeration, and stacking on a plastic-lined heap, with gold recovery using activated carbon. Heap leaching represents 46% of global gold production.