Intermin Resources Ltd.'s board approved the stage-one development of the open-pit Teal gold mine at its Binduli North property in Western Australia.
The company said Oct. 11 that all statutory approvals and full funding are in place.
"Bringing Teal stage one into production is a major milestone for the company and comes at a time of reduced operating costs and a strong Australian dollar gold price to deliver significant cash flow to the business this financial year," Managing Director Jon Price said.
The mobilization of the mining fleet is underway, with first gold production expected later this quarter after 8 to 10 weeks of pre-stripping waste overburden.
At a gold price of A$1,665 per ounce, the stage-one Teal operation will generate A$9.3 million in free cash flow during the 2017 financial year.
Mined ore will be hauled 22 kilometers and processed under an ore treatment agreement with Norton Gold Fields Ltd.'s Paddington Gold Pty. Ltd. unit.
Intermin noted that half of the A$3.9 million development CapEx will be funded by RM Contracting, with the latter to get 25% of the free cash flow after recovering Intermin's asset discovery costs of A$2.2 million.
Ore treatment at the Paddington Gold plant, along with the participation of RM Contracting in the funding arrangement, increased the mine's estimated free cash flow to A$10.8 million over its nine-month life and reduced all-in costs to A$905 per ounce from A$953 per ounce of gold.
A feasibility study completed in July on the stage-one operation indicated that the open-pit mine will deliver about A$10.1 million in free cash flow over its nine-month life.