Laneway Resources (LNY.AX) has provided an update on its activities at the Agate Creek gold mine in North Queensland. The company is planning on mining 43,000 tonnes of rock with an average grade of 6.5 g/t gold during the current mining campaign, and truck the rock to the Lorena mill where it will be toll processed.
An initial 3,000 tonnes of higher grade material has already been mined, while an additional 3,000 tonnes with lower-grade rock (2.5 g/t gold) has been stockpiled. The Lorena mill is currently being updated to accommodate the first batch of 18,000 tonnes of the Agate Creek ore, and the majority of the rock will be processed in Q1 2021, and Laneway is also guiding for a strong positive free cash flow during that quarter, despite the relatively high strip ratio of 11:1.
Agate Creek is a small project, perhaps ‘hobby project’ would be the best description: the total pit-constrained resource consists of 120,000 tonnes at 5.7 g/t gold for 22,000 ounces. Of the 120,000 tonnes, 43,000 tonnes will be mined during the current campaign while Laneway is working on some environmental studies in order to expand its mining activities in 2021. It will be interesting to see how much free cash flow Laneway will make on the initial 43,000 tonnes which is expected to contain almost 9,000 ounces of gold. The current market capitalization of the company is just over A$25M and the incoming cash will be helpful to figure out the next steps for both gold projects while it’s in the process of selling the Ashford coking coal project to Aus Tin Mining.
Disclosure: The author has no position in Laneway Resources. Please read our disclaimer.
