Gold Duke Project Secures 24-Month Processing Agreement with Wiluna Mining
Western Gold Resources has secured a binding toll milling agreement with Wiluna Mining Corporation to process ore from its Gold Duke Project, marking a pivotal step towards production.
- 24-month toll milling agreement with Wiluna Mining Corporation
- Processing at Matilda Plant located 46km from Gold Duke Project
- Agreement supports staged development and transition to production
- WGR retains ore title; processing fees linked to gold price and ore characteristics
- Preferred mining contractor SSH Group appointed for project execution
A Strategic Processing Partnership
Western Gold Resources (ASX, WGR) has taken a significant stride in advancing its Gold Duke Project by executing a binding toll milling agreement with Wiluna Mining Corporation (WMC). This 24-month deal, commencing mid-June 2025, enables WGR to process gold-bearing ore at WMC’s Matilda Processing Plant, situated just 46 kilometres from the mining site in Western Australia.
The proximity of the Matilda Plant offers WGR a cost-effective and logistically sensible solution for ore processing, leveraging established infrastructure and reducing haulage expenses. The plant’s conventional carbon-in-leach (CIL) technology aligns well with the ore characteristics, promising efficient recovery rates.
Operational and Financial Implications
Under the agreement, Western Gold Resources will deliver ore to WMC’s run-of-mine pad, while WMC assumes responsibility for crushing, processing, and refining. Importantly, WGR retains ownership of the ore throughout the process, with processing fees calculated on a fixed rate per tonne, adjusted for gold price fluctuations and ore abrasiveness. This arrangement provides WGR with clear cost parameters while maintaining flexibility amid commodity price volatility.
Managing Director Cullum Winn highlighted the milestone as a critical enabler for the company’s transition from development to production. With mining approvals secured for multiple pits within the Gold Duke Project and SSH Group Ltd appointed as the preferred mining contractor, WGR is positioning itself to move swiftly into operational phases.
Looking Ahead
The toll milling agreement not only secures a processing pathway but also signals confidence in the project’s viability and timeline. WMC’s option to extend the agreement by six months adds a layer of operational flexibility, potentially accommodating production scale-up or unforeseen delays.
While the agreement is subject to WMC’s deed of company arrangement, which introduces some execution risk, the partnership reflects a pragmatic approach to advancing Gold Duke without the capital intensity of building a dedicated processing facility. Investors will be watching closely as ore delivery and processing ramp up, alongside updates on mining operations and production milestones.
Bottom Line?
With processing secured, Western Gold Resources is poised to turn Gold Duke’s potential into tangible production.
Questions in the middle?
- How will WMC’s financial restructuring impact the toll milling agreement’s execution?
- What are the expected processing volumes and timelines under the current agreement?
- How will fluctuations in gold price and ore characteristics affect processing costs and project economics?