Westgold Resources has proposed to develop a third mine in Western Australia following its failed attempt to acquire Gascoyne Resources’ Dalgaranga operation in the Mid West.
Westgold this morning said it had completed positive development studies for its Fender deposit, which is expected to come online this financial year.
The underground mine will form part of the company’s Cue operations, with ore to feed the existing 1.4 million tonnes per annum Tuckabianna processing plant.
Its Cue operations include the Big Bell underground mine, located 3.5 kilometres from Fender.
Executive director Wayne Bramwell labelled the deposit a simple and low-cost development with an annual production target of between 300,000 tonnes and 350,000t.
“With Big Bell approaching full capacity we have an excess of ore sources that can feed our Tuckabianna processing hub,” he said, adding Westgold will consider options to establish a fourth processing hub.
Fender was identified as a potential development earlier this year, along with Westgold’s Bluebird underground deposit and Aladdin open pit (also in the Mid West).
Westgold was seeking to acquire Gascoyne Resources and its Dalgaranga operation through an all-scrip deal that valued the target at roughly $120 million.
But Gascoyne was not capable of accepting the offer since it was locked into a separate merger agreement with Subiaco-based Firefly Resources, approved by the Supreme Court of WA last week.
Westgold is seeking to withdraw its offer, having sought consent from ASIC.
Its shares closed up 6.4 per cent on Monday to trade at $2.08 each.
