AMD consolidates assets in bid to restart Blackjack mill

AMD Resources’ plans to restart Blackjack mill about 8km south of Charters Towers have taken a decisive turn. AMD has entered into an agreement with creditors of Maroon Gold to take over the Blackjack plant and mining leases. The acquisition is expected to be completed later this year, along with an Initial Public Offer by AMD. Recent care and maintenance history In January 2020, Perth-based European Cobalt opted out of a deal to buy Maroon Gold. Gold pour from Blackjack Mill Maroon Gold, then a private equity backed vehicle, achieved its first gold pour in 2019 after a $5 million project to refurbish and modernise the Blackjack processing plant. It was initially feeding the plant with ore from Far Fanning – one of a portfolio of gold projects Maroon Gold held in the region. Others included the Great Britain deposit on the outskirts of Charters Towers, Granite Castle, and multiple mining leases around the Blackjack plant where high-grade production dates back to the early 1900s. At that time, Maroon Gold had also been mining and processing high-grade gold material from Laneway Resources’ Agate Creek gold project, near Kidston. Related: Ore leaves Agate Creek as Laneway flags ‘busy 2021’ AMD’s plan was to develop tenements on the lease and offer toll milling services in the meantime, said AMD Resources chief executive officer Tony Bell. There were 778 known and registered gold deposits within a 100km radius of Blackjack mill, Mr Bell said. “We plan to establish Blackjack as a processing hub for the general area offering toll milling services,” Mr Bell said. “And then we have targets within the tenement package that we will be working on”. “The first three open pit targets, we see a reserve of perhaps 250,000 ounces. We've got to complete drill and resource estimate programs and a feasibility study before we're ready to mine those, it may be two years out. “So what we've decided to do is establish toll milling services in the meantime, and after two, two and a half years, then we'll start mining and processing our own ore.” Boon for Charters Towers Toll milling came at the right time for the district which was experiencing a resurgence of exploration activity on the back of continuing strong gold prices, he said. Charters Towers “There're plenty of small gold deposits around the place that are small enough that they'll probably never afford to build their own mill. “We've had approaches from people with as little as 5,000 tonnes of material that they want to mill, but a couple of comments on that. "Number one is that the mill's on care and maintenance right now and the restart requirements are currently being determined. “Number two, you wouldn't start up on 5,000 tonnes. You've got to have a good pipeline for the better part of a year. You don't want to be starting and stopping the mill all the time.” The nameplate capacity of the mill, which has been in care and maintenance since 2019, is 340,000tpa. The company estimates that it would employ around 20 staff to run the mill. Add to that the miners, suppliers and contractors and Blackjack would be making a significant contribution to the Charters Towers economy once operating again, Mr Bell said. The company has also negotiated with Denjim Pty Ltd and entered into an agreement to develop and mine the Hadleigh Castle gold mine, part of the Burdekin Project located around 45km east of Blackjack Mill. Hadleigh Castle had great potential, and the company would be working to keep it as an open cut mine as long as possible before reopening the underground mine, Mr Bell said. AMD was also planning to build a solar farm at Blackjack and are taking expressions of interest from potential offtake partners. The AMD IPO prospectus is scheduled for completion in October.

AMD consolidates assets in bid to restart Blackjack mill

Industry Queensland

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