Manuka Resources Limited (ASX: MKR) has executed binding documentation to secure the purchase of Oceana Gold (New Zealand) Ltd’s Reefton processing plant.
A $30,000 deposit has been paid and the full acquisition cost of an additional $370,000 will be funded from the company’s internal resources. The modest purchase price is a fraction of the cost for new flotation plant equipment.
The purchase is part of Oceana’s Reefton Restoration Project. The Reefton plant was designed by GRD Minproc largely from Outotec componentry. It operated for around 10 years from 2007, during which time it produced >600,000 oz gold in concentrate from Oceana’s Globe Progress Mine.
The plant has been on care and maintenance since 2017 and is in good condition.
Manuka expects to commence relocation of the plant by mid-2022 and if required, could have the facility production ready, on site and adding to the existing Wonawinta capacity by early 2023 if required.
The purchase is opportunistic and is based on the following considerations:
1) neighbourhood exploration success,
2) initial on-site results from our deeps and broader exploration program
3) consultant confidence that commercial quantities of ore appropriate for processing by a flotation circuit will likely arise emerge as a result of the ongoing exploration programme.
Executive Chairman, Dennis Karp, said Manuka believes the addition of the flotation circuit adds materially to the inherent value of the company.
“Together with its existing 850,000tpa leach circuit, processing optionality and flexibility is significantly increased and allows the site to reach its full potential processing ore from the Wonawinta deposit and future surrounding resources.
“While installing the flotation plant in a conventional configuration enables potential production capacity approaching 1Mtpa, Manuka will now have the required future capacity and ability to process oxide and/or sulphide ores as needed.
“Plant options for stand-alone Flotation and Leach circuits are also being reviewed. In this configuration, the process feed could equate to circa 850k – 1.0Mtpa for each circuit (which would in effect double current capacity) but would be subject to the addition of a second comminution circuit (crushing and grinding circuit).”
Manuka does have a second ball mill which it is currently using as a regrind mill, but it is limited in size. When installed, the plant will sit alongside the existing leach plant in close proximity to our tailings dam.
Manuka has long viewed the Cobar Basin as being attractive for corporate consolidation and sees itself playing a role. There are around 20 explorers and emerging producers in the Basin and Central West region, yet only four companies with a combined total of five operating production facilities (of which Manuka is one).
Equipment supply delays arising from Covid are materially lengthening project timelines. The combined effect of this and an already time consuming permitting and approval process necessary for any new project, is negatively impacting many development schedules. Readily available process equipment readily is considered a material advantage. Manuka has generated ~A$12.0m in profits over the past six months (unaudited) as it continues to fund an exciting exploration programme from working capital.