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Lunnon Metals (ASX: LM8) has commenced mining preparation at the Lady Herial gold project in Western Australia just weeks after receiving a positive go-ahead from its board.
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The company has signed construction sontracts with Hampton Mining & Civil Services and Goldfields Technical Services allowing clearing and site establishment to begin with mining of the first benches imminent.
Hampton Mining & Civil Services is contacted for mining operations and Goldfields Technical Services of Kalgoorlie (or statutory positions, operational blast design, dig plans, mine geology, surveying and general site/run of mine (ROM) pad management.
This will be the first new mine on the Foster belt for more than 30 years and the first open pit on land at St Ives since 2014.
MD, Edmund Ainscough,said the go-ahead at Lady Herial is the culmination of months of focused effort to de-risk the project on the technical, geological and regulatory fronts.
“It also represents nearly two years of hard but smart work by the exploration team. “
In Mid-January, Lunnon and major shareholder St Ives Gold Mining (SIGM) completed detailed bench by bench design which led to the completion of the fasibility study.
An agreement with SIGM on a detailed mine schedule also satisfies the last remaining condition precedent to an ore purchase agreement (OPA).
Based on the feasibility study, the mining of approximately 268,000 tonnes at 1.89 g/t gold for 16,270 ounces has the potential to yield approximately $45 million in pre-tax cash flow for Lunnon Metals at the current Australian dollar gold price.
The feasibility study detailed robust economics for a short-life, high grade, low strip ratio open pit, to be mined and processed within eight to 10 months.
Operating free cash flow (pre-tax) is recorded as $40.4 million.
LM8 is up 10.0% at 38.5¢. Mkt cap $78.16M
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