The A$17 million cash and share deal will see it buy out Masterson Minerals in stages between now and October, and will give it access to a "barely used" carbon in pulp plant, a portfolio of mining and exploration leases, and maiden inferred resources of 119,000 ounces grading 3.9 grams per tonne, with plenty of upside.

 

Laneway managing director Brad Gordon said opportunity to buy a dominant position in the highly prospective Etheridge gold field was critical to the company's plans to develop two processing hubs, and process both oxide and sulphide material within five years.

 

"We can see a point where Laneway is producing 100,000ozpa from two plants," he said.

 

"This deal gives us control over our own gold production, which has been an issue in recent years."

 

Laneway, which recently announced plans to raise $5.5 million, aims to secure debt funding for the upfront acquisition costs, with operating cashflow expected to cover the deferred consideration.

 

The plant is 100km by road from Agate Creek, where mining recently recommenced, and will cut the transportation distance under its prior tolling arrangements with the Black Jack mill by up to 700km, saving Laneway $80-100 per tonne.

 

Laneway is set to commence works allowing a plant restart soon.

 

"We've had people climbing over the plant, and it's in quite good nick," Gordon said.

 

Originally built in the late 1980s, the plant was completely refurbished in 2010, but it has barely been used since because it was not permitted to process sulphide material.

 

Gordon estimates it will take about $2.5 million to refurbish, and Laneway should be running gold through the circuit before the end of the June quarter.

 

The work will include installing a ball mill that help increase capacity to 300,000tpa.

 

"We're going to need it," Gordon said.

 

The mill will be recommissioned using the 35,000t of 5gpt dirt first already stockpiled at the 471,000oz Agate Creek project, and Laneway and will assess initially options for recovering remanent ore at Georgetown. 

 

There are also some 70,000-100,000t of 1gpt in tailings that can "fill in any gaps".

 

Georgetown is likely to grow quickly, he said.

 

"Previous owners had much larger numbers attached to this project, but it will take time to drill through the resources we can see that aren't quite JORC compliant yet," he said.

 

"The resources will increase rapidly."

 

Gordon said the blue sky offered to Laneway was the untested potential of the wider Etheridge gold field, which he sees as one of the most prospective in Queensland, where it will now control some 1030sq.km.

 

There are 112 pits in the area that took the oxide ore, and many stopped when they hit sulphide ore because there was no way to process it.

 

It gives Laneway plenty of targets for deeper drilling, given most holes stop at 60m.

 

"There are over 1000 mines and prospects in the region, including the 3.4Moz Kidston deposit, and many occurrences and small resources that are in dire need of exploration."

 

Georgetown is the only plant within a 400km radius, and Laneway wants to make it a regional hub.

 

It is already in discussions with the owners of stranded resources.

 

Gordon expects the sulphide circuit can be added later this year cat a cost of $2 million, once permitted.

 

It is also exploring options for gravity gold recovery.

 

Georgetown will help fund the proposed 750,000tpa oxide mill at the high-grade Agate Creek, with Laneway seeing indications of more exploration success, including potential for Kidston-style mineralisation.

 

Laneway shares were up 18% this morning to 0.6c, valuing it at $25 million. 

 

The stock has traded at 0.4-0.8c over the past year.