Kagara buys copper zone at Mungana Goldmines’ Red Dome Gold prices

Kagara buys copper zone at Mungana Goldmines’ Red Dome 
PERTH (miningweekly.com)− ASX-listed Kagara has entered into an agreement with fellow-listed Mungana Goldmines to take ownership of the Red Dome copper zone, in Queensland, in return for a 4% net smelter royalty on all ore mined from the project area.

Mungana Goldmines initially identified the Red Dome copper zone, which includes a series of high-grade copper intersections, during its gold exploration-drilling programme.

In a statement to the market, the companies said that under the agreement, Mungana Goldmines would still have sole ownership of any mineralisation outside the copper area.

Kagara would reimburse Mungana Goldmines’ costs, which were incurred to date in the drilling of the Red Dome copper zone.

Kagara told shareholders that it would continue to aggressively delineate a resource and consider a decision to mine later in the year.

Once a decision to mine had been reached, it was anticipated that underground development would proceed from Kagara’s existing Mungana mine decline, which was around 2,8 km from the Red Dome area.

As part of the settlement, Kagara has also agreed to transfer the underground development and workings at Red Dome and the Mungana project to Mungana Goldmines, at no cost, once Kagara has completed mining.

Mungana Goldmines said that it would shift its focus to the 24-million ton potential openpit development at the Red Dome gold deposits.

The Red Dome project has a total resource of 2,5-million ounces of gold, 225 000 t of copper, and 32-million ounces of silver.

Mungana Goldmines was targeting a resource capable of sustaining a substantial, long-life gold mining operation at Red Dome, to produce more than 120 000 oz/y of gold.