Mount Coolon gold project proponent GBM Resources is advancing a share placement campaign to allow the acquisition of Millstream Resources.
GBM says the move has the potential to support its working capital requirements and the ongoing development of the Mount Coolon project in Central Queensland.
Millstream, a subsidiary of Stibium, stands to earn a 50 per cent stake in the White Dam gold project in South Australia through a joint venture agreement with Round Oak Minerals.
GBM sees the opportunity to generate cash flow through heap leach production at White Dam amid high Australian gold prices.
GBM says also the White Dam operation’s gold recovery plant could be relocated to the Mount Coolon Eugenia heap leaching project to support its development should GBM exercise its option to acquire 100 per cent of the project.
A scoping study completed in 2017 showed that the redevelopment of the Mount Coolon gold project had the potential to generate a strong positive cash flow.
That study was based on a gold price of $1667 per ounce – while prices have recently been around $2150 per ounce, potentially adding $75 million in revenue.
The project, south-west of Collinsville, includes the Koala and Glen Eva deposits on granted mining leases as well as the Eugenia resource.
In GBM’s annual report in October, executive chairman Peter Thompson said the company’s exploration strategy was to build the resource base in the Mount Coolon area to 2 million ounces of contained gold.