en.Wedoany.com Reported - Odyssey Gold has signed a toll milling agreement with Gylden Resources, paving the way for commercial production at its flagship Tuckanarra Gold Project in Western Australia's Murchison region in the first quarter of 2027. Under the agreement, Odyssey Gold can process up to 750,000 tonnes of Tuckanarra ore at Gylden's Kirkalocka processing plant, which is located approximately 191 kilometres south of Tuckanarra.
The agreement covers a minimum of 600,000 tonnes of ore across four quarterly batches commencing Q1 2027, with an additional 150,000 tonnes available subject to processing capacity. The agreement also provides for the potential extension of the Toll Milling Agreement (TMA) into 2028. Odyssey Gold (ASX:ODY) will pay a competitive fixed toll milling fee under the agreement, providing it with potential revenue acceleration and cash flow, representing the fastest and lowest capital expenditure pathway for the Tuckanarra project. Both Tuckanarra and Kirkalocka are located adjacent to the Great Northern Highway, offering excellent transport conditions.
The Kirkalocka Carbon-in-Leach (CIL) processing plant, situated adjacent to the Great Northern Highway, last operated in 2022 and has been under care and maintenance since then. Gylden has planned to refurbish and restart the plant, enabling it to process a variety of fresh and oxide ores from its own Kirkalocka project and regional projects. The toll milling agreement is binding, conditional upon Kirkalocka commencing operations and ODY making a positive decision to mine its Tuckanarra project by 30 September 2026.
Odyssey Gold is undertaking a Stage 1 Scoping Study to identify the initial starter pit at Tuckanarra for processing at Kirkalocka. This will be followed by a Stage 1 Feasibility Study, and an expanded Stage 2 Scoping Study covering the broader Tuckanarra resource, which totals 5.14 million tonnes at 2.5g/t for 407,000 ounces of gold. Tuckanarra hosts a resource of approximately 4.2 million tonnes at 2.3g/t for 311,000 ounces of gold within Mining Lease M20/527, which contains an existing Mining Proposal supporting near-term open-pit mining potential.
Tuckanarra forms part of the richly endowed Murchison gold region, which hosts over 35 million ounces of gold. The project saw historical production in the 1990s from shallow oxide pits at Cable, Bollard, Maybelle, Bottle Dump, and Kohinoor, with total production of approximately 101,000 ounces of gold at an average grade of 3.9g/t. The modern Kohinoor underground mine also produced 15,000 ounces at 12g/t gold. Previous resource development and open-pit mining primarily targeted lateritic and oxide mineralisation, while the company's exploration to date has largely focused on drilling around and beneath existing deposits. Significant strike and plunge extensions to mineralisation may exist, including the unmined Highway deposit, which has a resource of 97,000 ounces at 3.8g/t and represents a strike extension of the Cable-Bollard mineralisation.
The company is currently completing the Stage 1 Scoping Study, covering the initial starter pit at Tuckanarra on M20/527, potentially including some adjacent resources outside the 2014 Mining Proposal, with completion expected in the coming weeks, followed by the Stage 1 Feasibility Study. ODY is also undertaking an infill drilling program at the M20/527 deposits, with this drilling data to be incorporated into a new resource estimate alongside extensive successful infill drilling data completed in 2025, which yielded intercepts such as 19m at 13.7g/t gold from 61m, 14m at 13.6g/t gold, and 22m at 2.8g/t gold. The updated resource will form the basis for the expanded Stage 2 Scoping Study, scheduled for completion in the second half of 2026, which will encompass the entire resource and consider mining and processing options beyond the toll milling agreement. Given the broader resource base exceeding 5 million tonnes and remaining exploration potential, the company believes there is potential for several additional years of mining beyond the initial agreement.
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