Forrestania Signs 2 Million Tonne Gold Ore Purchase Agreement in Australia

en.Wedoany.com Reported - On September 14, Forrestania Resources signed two long-term commercial agreements with Australian mining contractor MEGA Resources, among which the ore purchase agreement allows Forrestania to purchase and process up to 2 million tonnes of gold ore over 24 months, with the first feedstock to come from the existing ore stockpile at the Taipan open-pit mine operated by MEGA. The ore may, at Forrestania's option, be sent to either the Lake Johnston or Edna May processing facilities, with individual batch processing volumes ranging from 50,000 to 150,000 tonnes.

Under the agreement, Forrestania will retain ownership of the gold and other associated minerals recovered after processing, and will pay MEGA for the ore based on ore grade and metallurgical recovery. The current baseline conditions are an ore grade of 1.43 g/t and a gold recovery rate of 91%, corresponding to a base purchase price of AUD 155 per tonne; actual settlement will be adjusted according to the ore grade, metallurgical performance and acceptance criteria agreed upon by both parties. The maximum cumulative ore supply under the agreement is 2 million tonnes, but this does not equate to MEGA having committed to supply all 2 million tonnes.

The first ore is planned to come from the Taipan open-pit mine, which is operated by MEGA. Forrestania is currently building a regional gold processing system centered on Lake Johnston and Edna May, increasing the utilization of existing and proposed restart processing facilities by introducing third-party ore. On September 9, the company signed another similar agreement with First Au, allowing it to purchase and process up to 2 million tonnes of ore from its Gimlet gold project over 24 months; this agreement with MEGA means its third-party ore sources have further expanded.

In addition to ore purchase, Forrestania and MEGA also signed a master services agreement, establishing a long-term framework for subsequent open-pit mining, drilling and blasting, ore and waste rock haulage, and related mine support services. Future specific works will be issued through separate work orders, without the need for full contract negotiations to be repeated for each project; currently, the framework does not stipulate that Forrestania must award a minimum volume of work to MEGA.

The two parties had already established a mining cooperation. In August, Forrestania awarded MEGA an open-pit mining contract worth approximately AUD 145 million for the Johnson Range gold project, with a contract term of about two years, covering drilling and blasting, loading and hauling, ore and waste transport, road and mine infrastructure construction, and operational support. With the addition of the ore purchase and services framework, the cooperation between the two parties has further extended from single-mine mining contracting to ore supply, ore processing and regional mining services.

Forrestania is also advancing the resumption of operations at the Lake Johnston processing facility. The company has previously engaged Polaris Engineering and Como Engineers to carry out facility refurbishment and plans to advance to production in the fourth quarter of 2026. The company's current strategy is to supply feedstock to the processing center through both its own mines and third-party ore, reducing the impact of a single ore source on the processing plant's load.