Following due diligence, Hanking and NPS signed the agreement just before Christmas to jointly develop the mine with the aid of NPS’ underground mining equipment and technology.
NPS is a wholly owned subsidiary of Perth-based Pit ‘n’ Portal Group and its personnel have experience working on the historic Nevoria gold mine.
Nevoria East has a probable reserve of 67,000 ounces of gold and is expected to produce 30,000oz gold this year.
NPS will provide up to $A7 million in project financing for the development.
The partnership is on a profit-sharing basis, with NPS to receive 20%.
“This strategic partnership is formed on a complementary basis, aligning the strength and interest of both parties and allowing Hanking Gold to better utilise its infrastructure, especially the ore processing capacity, to maximise synergy and economies of scale, significantly reduce its operating costs and production risks, and hence improve the profitability,” Hanking president and CEO said Dr Qiu Yumin said.
The companies will also carry out further feasibility studies with a view to co-operate on other deposits across the 930sq.km Southern Cross (SXO) tenements.
“The latest partnership further evidenced the potential of the SXO gold project,” Hanking chairman and executive director Dr Pan Guocheng said.
“The company will continue to identify opportunities to fully utilise its complete set of infrastructure and vast resource potential of Hanking Gold to maximise the values for shareholders of the company.”
Hanking acquired SXO from St Barbara in 2013 and resumed open pit operations in August.
Mining is currently at a rate of around 35,000 tonnes per day and the refurbishment of the 2.4 million tonne per annum Marvel Loch plant is nearly complete.
Production guidance for 2015 is 100,000oz, including the contribution from Nevoria East.
Since acquiring the project, Hanking has increased resources from 2.4 million ounces of gold at 3.6 grams per tonne gold to 2.8Moz at 3.8gpt gold.