en.Wedoany.com Reported - Flynn Gold (ASX:FG1) has signed a non-binding ore purchase agreement with the operating Henty Gold Mine, opening a potential low-capital-expenditure pathway for the company's gold production in Tasmania.
The agreement was signed between Henty Gold Pty Ltd, a subsidiary of Kaiser Reef (ASX:KAU), and Flynn Gold. Henty Gold operates the Henty Mine and processing plant in western Tasmania. The agreement covers the framework and indicative commercial terms for processing ore or concentrate from Flynn Gold's Tasmanian projects through Henty's existing plant, with the initial target being the Golden Ridge Project in northeastern Tasmania, while also covering Flynn Gold's broader project portfolio in the state. The agreement does not obligate either party to any transaction and does not guarantee that a binding deal will be reached subsequently.
Flynn Gold Managing Director and Chief Executive Officer Neil Marston stated that this agreement is a significant step toward the company's goal of becoming a Tasmanian gold producer. Utilizing an existing operating gold processing plant to treat ore can reduce upfront capital requirements while accelerating the transition of projects from development to production.
Under the agreement, Flynn Gold can evaluate options to sell ore or concentrate to Henty, thereby reducing upfront capital investment in processing. If ongoing studies confirm that this pathway is technically and commercially viable, leveraging Henty's existing plant would help lower upfront capital costs and accelerate project development. The indicative commercial terms attached to the agreement are confidential and can benefit both parties; meanwhile, both parties have signed a confidentiality agreement allowing for information sharing and collaboration during the evaluation of this opportunity.
The Golden Ridge Project will be the first direct test of the proposed production pathway. Previous metallurgical test work has shown gold recovery rates exceeding 94% using a leaching process similar to that at the Henty plant. Flynn Gold has submitted its first mining lease application for Golden Ridge, which includes a proposed processing site located near grid power supply and an all-weather sealed road. In its long-term planning, the company will also evaluate options to build a low-capital-expenditure plant at Golden Ridge to produce high-grade gold concentrate for supply to Henty. Over the coming months, Flynn Gold plans to provide Kaiser Reef with a batch of quartz vein material collected from Golden Ridge for on-site testing.
Development of the Golden Ridge Project and the Henty processing evaluation are progressing in parallel. Flynn Gold's work program includes flora and fauna and water surveys, resource drilling at the Brilliant and Trafalgar prospects, and metallurgical studies designed around potential feed requirements for Henty. The drilling aims to expand the exploration target at Golden Ridge and convert part of the mineralized system into mineral resources. Meanwhile, the company is advancing stakeholder engagement in parallel with environmental, technical, and regulatory work streams.
Flynn Gold's broader project portfolio leaves room for subsequent evaluations under the Henty framework. The company holds ten 100%-owned tenements in northeastern Tasmania with gold, tin, and tungsten exploration potential, as well as the Henty silver-lead-zinc project on Tasmania's west coast and the Firetower tungsten, gold, and critical metals project in the north.
