Australian gold producer Focus Minerals (ASX: FML, “Focus”) is pleased to announce the signing of a Toll Treating Agreement with TSX-listed mining company, La Mancha Resources, (TSX: LMA; “La Mancha”) for the treatment of ore from La Mancha’s White Foil Gold Project.
La Mancha’s White Foil project is located 26km from Focus’ newly commissioned Three Mile Hill processing plant and the agreement provides La Mancha with a minimum of 200,000 tonnes of milling capacity, shared equally between two milling campaigns scheduled for April and September 2010.
The agreement will generate valuable revenue for Focus as well as providing feedstock for Three Mile Hill in its ramp-up to full scale production.
Focus’ Chief Executive Officer, Mr Campbell Baird, said the agreement with La Mancha provides substantial benefits to both parties: “We are very happy to be in a position to help La Mancha realise their production ambitions at White Foil, while at the same time generating cash flow for ourselves,” he said.
“It’s essentially a win-win situation, particularly at such an early stage of our production ramp-up where we will be able to utilise excess production capacity. Processing the ore for La Mancha in 2010 will also help with plant efficiency, with the need for utilising Focus’ low-grade ore stockpiles reduced during our ramp-up to full production,” he added.
“We look forward to working with La Mancha Resources during these two milling campaigns in 2010 as we place the necessary foundations for Focus to become a significant gold producer in the region,” said Mr Baird.
Earlier this month, Focus completed its first significant gold pour from the newly commissioned Three Mile Hill processing plant which was refurbished at a cost of A$16.96 million.
Up until this latest gold pour at Three Mile Hill, Focus had been toll treating ore from its Tindals Mining Centre in Coolgardie at the nearby Greenfields mill.
The Three Mile Hill plant has an annual capacity of 1.2 million tonnes, enabling Focus to increase production to an expected 80,000oz in 2010 and more than 100,000oz in 2011. Importantly, the Three Mile Hill plant will enable the Company to cut operating costs and benefit from a more consistent production profile.