LONDON (Alliance News) - Keras Resources PLC Tuesday said it has exercised an option agreement that allows the company to mine the Lindsay's gold project in Western Australia owned by KalNorth Gold Mines Ltd.
Keras acquired the option back in March 2016, giving it an exclusive option to mine the project for a share of the net revenues that are generated from the project. Keras and KalNorth will not finalise a formal agreement before mining operations begin.
The project has open pit and underground resources containing 215,000 ounces of gold, 77% of which lies in the indicated resource category. The resource includes the Parrot Feathers deposit, which has a resource of 401,000 tonnes of ore at 4.2 grammes of gold to contain a total of 54,000 ounces.
"Keras, at its cost, is currently undertaking an internal assessment to look at decreasing dilution by developing on reef and upgrading the ore through the use of optical sorters. The mining will initially start on the remaining open pit resources with a fully ramped up underground production rate expected to be between 10,000 and 20,000 ounces per annum," said Keras.
A reverse circulation rig will be mobilised this month so grade control drilling can start at the first of three open pits that will initially be targeted by Keras. Those three initial targets contain around 7,900 ounces and more drilling is required on two of the three pits before a final decision to mine them is made.
"Subsequent to the successful GBP1.25 million placing last month, we are pleased to have been able to fast-track our internal assessment of the Lindsay's mine to the point that we are now comfortable to exercise the KalNorth Option to redevelop the project," said Managing Director Dave Reeves.
Keras shares were trading up 4.2% to 1.25 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Keras Res (KRS)