Lorena Gold Project - MLs 7147, 90192 to 90196 and EPMs 18908 and 18189
The Lorena Gold Project is located about 15km east of Cloncurry in northwest Queensland.Malachite is the holder of six mining leases (ML7147, MLs 90192-90196), two exploration permits (EPM18189 and EPM18908).
The Project is a joint venture between Malachite 55%, Cloncurry Gold Recovery Management Pty Ltd (“CGR”) 30% and Ore Processing Services (OPS) 15%. CGR is the manager of a joint venture between Chinova Resources Pty Ltd (70%) (“Chinova”) and BIM Gold Pty Ltd (30%). BIM Metals Pty Ltd is the joint venture manager. Malachite’s interest in the Lorena Project is held by its wholly-owned subsidiary, Volga Elderberry Pty Ltd (“Volga”).
The Company advises operational performance at the Lorena Project has been well below expectations.
Joint Venture Matters
As previously reported, Chinova Resources Pty Ltd (Chinova) has withdrawn a working capital financing facility, which had previously been extended to joint venture participants to fund ongoing operations.
Volga has initiated a Dispute Resolution process in accordance with the terms of the Joint Venture Agreement dealing with numerous matters, which principally relate to achieving a reconciliation of historical joint venture expenditure and the future conduct of the joint venture.
Malachite has repeatedly requested that the Joint Venture Manager provide detailed information in relation to project cash calls issued by the Joint Venture Manager to Chinova and paid by Chinova on behalf of the Company. Malachite has also requested detailed project information and presentations so that it can properly assess project returns. Malachite remains unable to properly assess its position in relation to the joint venture and future cash calls until this information is provided by the Joint Venture Manager.
Malachite has made a recommendation to the Joint Venture Committee that operations should be suspended while outstanding issues are resolved however this recommendation was rejected by the other joint venturers.
Malachite is currently in discussion with the JV partners to resolve the dispute which includes the renegotiation of the Lorena JV terms. Progress continues to be made during the quarter and the Company is hopeful for a resolution in the short term.
Lorena Gold Project – Tenement Plan
Lorena Processing Plant