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(Sharecast News) - Great Western Mining has signed a non-binding memorandum of understanding to create a joint venture with an unnamed "experienced" Nevada mining contractor, it announced on Tuesday, for processing gold and silver from waste material on its mineral concessions in the US state.
The AIM-traded firm said it was currently negotiating a fully-termed operating agreement with its proposed partner, which would follow a "standard industry format" used in Nevada.
It said the venture would process material using both gravity separation and a contained flotation system, full details of which would be announced on the signing of the formal agreement.
The company said the venture had now secured the use of a suitable mill site on private land, determined an initial design for both a gravity separation plant and a flotation plant, and identified and secured the equipment required.
Great Western said it had allocated up to $0.1m to the venture, to facilitate the detailed planning stage and submission to the Nevada Department of Environmental Protection.
The equipment identified would, in most cases, be pre-used mine equipment sourced locally, the refurbishment cost of which was expected to be "significantly less" than the cost of new equipment, providing for economical start-up costs and a faster lead-time to commissioning.
It said the venture would initially process material from the company's Mineral Jackpot and Olympic Gold properties.
The joint venture would also process material owned by the partner, and the partners would together source additional material from third parties for processing on a commercial basis.
At Mineral Jackpot, Great Western said it had over 50 spoil heaps left from five adjacent and connected historical mines which produced gold and silver in the late 19th and early 20th centuries.
The recently-upgraded 14 kilometre road to the site would enable a 20-ton dumper truck to load spoil material from the mountainous area.
At Olympic Gold, meanwhile, three sources of waste material had been identified and were being "extensively tested" for reprocessing, close to the high-yielding OMCO gold mine where operations ceased during the Second World War.
The plant would be located at a site which was previously used for mineral processing operations, and was "approximately equidistant" to Mineral Jackpot and Olympic Gold, on a "major highway" providing easy vehicle access.
"At the end of 2020 we successfully produced a doré bar of gold and silver from spoil material at our Mineral Jackpot claims and established the potential for processing such material on a commercial scale," said chairman Brian Hall.
"An initial low level gravity separation project was evaluated but this has since expanded as other material has been identified on our concessions, including significant tailings at the Olympic Gold Project.
"The ingredients are now in place to create a commercial plant to handle such material from all our concessions, where available, as well as processing material for third parties on a commercial basis."
Hall said that opened "a new chapter" in Great Western's story, which would run in parallel with its efforts to explore for and identify significant reserves of precious metals and copper, aiming to achieve an "order of magnitude" increase in value for shareholders.
"We will provide more information on the joint venture, the plant and the detailed research we have carried out on the resources available to us as soon as we are in a position to do so."
At 1505 BST, shares in Great Western Mining Corporation were up 14.51% at 0.15p.
Reporting by Josh White at Sharecast.com.
