GBM Resources Ltd. signed a nonbinding term sheet to sell ore from the Koala and Glen Eva deposits at its Mount Coolon gold project in Queensland, Australia, to Minjar Gold Pty. Ltd. for processing at its Pajingo gold operation.
A binding agreement is expected to be executed by Feb. 28, 2018.
The company said Dec. 19 that it will sell the Glen Eva and Koala resources over 2.5 years, with net proceeds from gold sales to be shared equally between the two parties.
The Mount Coolon project hosts measured, indicated and inferred resources totaling 6.7 million tonnes at an average 1.5 g/t of gold for 330,500 ounces, which also includes the Eugenia deposit.
GBM plans to start mining the Koala central pit in the September quarter of 2018, with the Koala North and Glen Eva pits scheduled to be mined in the March quarter of 2019. Mining is subject to various approvals for environmental approval and plan of operations amendments being secured.
The company completed a scoping study on Mount Coolon earlier in December that defined a pretax net present value of up to A$45.3 million, discounted at 6%, and an internal rate of return of 48.3%.