How BMG’s New Processing Deal Could Unlock Abercromby Gold Production
BMG Resources has signed a key Memorandum of Understanding to process ore from its Abercromby Gold Project at the nearby Matilda Processing Plant, marking a pivotal step toward production. This agreement supports BMG’s transition from developer to gold producer amid a strong gold price environment.
- Non-binding MoU signed with Wiluna Mining Corporation for toll treatment at Matilda Plant
- Abercromby Gold Project holds 518,000oz maiden resource with high gold recoveries
- Matilda Plant’s carbon-in-leach facility located just 20km from Abercromby
- Toll treatment agreement to underpin scoping study for potential mine development
- BMG targets low-capex, fast-tracked development leveraging existing infrastructure
A Strategic Processing Partnership
BMG Resources Limited (ASX – BMG) has taken a significant stride toward becoming a gold producer by signing a non-binding Memorandum of Understanding (MoU) with Wiluna Mining Corporation (WMC). The MoU outlines a framework to negotiate a toll treatment agreement for processing ore from BMG’s 100%-owned Abercromby Gold Project at WMC’s Matilda Processing Plant, located just 20 kilometres away.
This proximity offers a logistical advantage, enabling BMG to leverage an already operational carbon-in-leach (CIL) processing facility without the need for immediate capital-intensive plant construction. The Matilda Plant’s established infrastructure is well suited to process Abercromby’s free milling gold ore, which has demonstrated high recovery rates of 93% to 95% in metallurgical testing.
Robust Resource Base and Development Potential
The Abercromby Gold Project boasts a maiden Mineral Resource Estimate (MRE) of 11.12 million tonnes at 1.45 grams per tonne gold, equating to approximately 518,000 ounces of gold. The resource sits within a granted mining lease in a well-established mining district of Western Australia, providing regulatory clarity and access to key infrastructure such as roads and power.
Notably, the mineralisation begins near surface, supporting potential open-pit mining operations with the possibility of transitioning to underground mining at depth. High-grade zones within the resource, including a notable 935,000 tonnes at 5.06 g/t gold for 150,000 ounces, offer strategic options for phased development to optimise project economics.
Pathway to Production and Value Creation
Under the proposed toll treatment arrangement, BMG would deliver ore to the Matilda Plant’s run-of-mine pad, with WMC responsible for crushing, processing, and refining. BMG retains ownership of the ore throughout, with processing fees linked to tonnage and adjusted for gold price and ore characteristics.
This agreement is expected to underpin ongoing scoping studies aimed at defining a low-capital expenditure, high-margin development scenario. BMG’s chairman, John Prineas, emphasised the importance of this milestone, highlighting the potential for a fast-tracked development that could deliver significant shareholder value amid record-high gold prices.
Looking Ahead
While the MoU is non-binding and subject to final negotiation, it represents a critical step in BMG’s evolution from explorer to producer. The company is advancing feasibility studies to confirm the optimal approach to mine development and processing. Success here could position Abercromby as a compelling new gold producer in Western Australia’s prolific Goldfields region.
Bottom Line?
BMG’s processing deal with Wiluna Mining sets the stage for a potential near-term gold production breakthrough.
Questions in the middle?
- When will the toll treatment agreement be finalized and what are the key commercial terms?
- How will ongoing feasibility studies impact the project’s development timeline and capital requirements?
- What is BMG’s strategy for scaling production beyond initial open-pit mining phases?
