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Primary Gold to negotiate toll treatment for Coolgardie project with Westgold

Primary Gold Ltd. signed a memorandum of understanding to negotiate a two-year toll treatment agreement for processing of ore from its Coolgardie gold project in Western Australia at Westgold Resources Ltd.'s Jubilee mill.

Toll treatment at the 1.2-million-tonnes-per-annum carbon in pulp gold processing facility is expected to start July 1, 2018, if the agreement goes through.

The MOU gives the companies an exclusivity period until Dec. 31 to enter a deal, according to the Nov. 28 release.

Meanwhile, Maximus Resources Ltd. agreed to treat initial ore from the Coolgardie project through the Burbanks processing facility from March 2018 until June 2018.

The company holds five of the six approvals required to start mining at Coolgardie, including approvals for environment, water, waste management and safety, while the final mining approval is being assessed by the department of mines, industry regulation and safety.

A prefeasibilty study for the Coolgardie project estimated a posttax net present value, discounted at 8%, of A$14.8 million. Over a 28-month mine life, the company aims to recover 65,000 ounces of gold at all-in sustaining costs of A$86.2 million, or A$1,322 per ounce.