PERTH (miningweekly.com) – ASX-listed Vango Mining and Dampier Gold have struck a heads of agreement which could see the development of the K2 underground gold mine, in Western Australia.
The K2 desposit forms part of the broader Plutonic Dome project, which Vango acquired from Dampier at the start of 2016, for A$6.2-million.
Under the deal announced on Friday, Dampier will finance up to A$3-million, or 50% of the capital costs for the development of the K2 deposit, in exchange for up to 50% net profit derived from the K2 production over the life of the mine.
K2 has established infrastructure, including a recently refurbished haul road directly accessing the Plutonic gold mine treatment plant, box cut, portal and significant underground development.
Site work in preparation for dewatering of the underground decline and K2 pit has now started, and pumping will start in late January, with completion scheduled within 60 days thereof.
In addition, a programme of work has already been submitted and approved by the Western Australian Department of Mines and Petroleum to facilitate surface drilling.
Vango executive chairperson Bruce McInnes said on Friday that the proposed funding package and the start of dewatering and mining represented a significant milestone for Vango.
“Through the activities that are presently under way, Vango is transitioning from an explorer to a developer.”
The development of K2 represented the first project Vango has brought into production.
Edited by: Creamer Media Reporter
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