Barrier removed: GoldArc confirms binding development agreement for Leonora South

• GoldArc has set up a term sheet with Mineral Mining Services for the development of the Orion and Sapphire deposits.
• MMS funding 100% initial development; expenditure recoverable.
• No upfront capital required from GoldArc to bring the project into production.

GoldArc Resources (ASX:GA8) has this week formalised the commercial framework for a mine development partnership over the company’s Leonora South gold project in Western Australia.

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In a significant step forward for the project, the company has executed a legally binding term sheet with Mineral Mining Services (MMS), establishing the framework for the latter to fund and manage the full development pathway at the Orion and Sapphire gold deposits within Leonora South.

The two deposits host a combined JORC 2012 inferred mineral resource of 48,014 ounces at 2.15 grams per tonne (g/t).

MD, Paul Stephen, said conversion of a previous letter of intent into a binding term sheet is a genuine milestone, with both parties pledged to the commercial framework that underpins Leonora South’s path to production.

“With MMS committed to funding up to $20 million of development costs at Orion–Sapphire, the capital barrier that typically prevents juniors from converting resources into production has effectively been removed,” he said today.

“GoldArc now has a funded development partner across both of its project hubs simultaneously, and we’re working closely with MMS to progress the formal Documents and advance Leonora South into the mine planning phase.”

Under the term sheet, MMS will fund 100% of all initial development expenditure required to bring the Orion and Sapphire deposits into commercial production.

All development costs are recoverable exclusively from project proceeds via an agreed waterfall; MMS’s sole recourse for cost recovery is revenues generated by the project.

Orion and Sapphire are located within the proven Kookynie goldfields, approximately 60 kilometres south of Leonora, in a district that historically produced over 360K ounces at 15 g/t at the nearby Cosmopolitan mine.

GA8 is down -1.47% to 6.7¢. Mkt cap $38.93M.

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