The agreement was signed with Henty Gold Pty Ltd, a subsidiary of Kaiser Reef (ASX:KAU) and operator of the Henty mine and processing facility in western Tasmania.
The agreement sets out a framework and indicative commercial terms for Henty to process ore or concentrates from Flynn Gold (ASX:FG1) Tasmanian projects through its established plant.
Golden Ridge in northeast Tasmania is the first focus, with the agreement also covering Flynn’s broader pipeline of projects across the state.
The agreement does not commit either party to a transaction, and there is no assurance that a binding deal will be reached.
Flynn Gold managing director and CEO Neil Marston said the agreement marked an important step in the company’s ambition to become a Tasmanian gold producer.
“The opportunity to process ore through an existing operating gold plant has the potential to significantly reduce upfront capital requirements while accelerating the pathway towards production from our Tasmanian projects,” he said.
The agreement allows Flynn to assess selling ore or concentrates to Henty, potentially reducing the processing capital required upfront.
Access to Henty’s established plant could cut upfront capital costs and accelerate development if ongoing studies verify the pathway’s technical and commercial viability.
Flynn says the confidential indicative commercial terms could deliver benefits to both companies.
The agreement is supported by a confidentiality agreement that allows the parties to share information and collaborate as they assess the opportunity.
Golden Ridge will provide the first direct test of the proposed production pathway.
Earlier metallurgical work returned gold recoveries of more than 94% using a leaching process similar to that employed at the Henty plant.
Flynn has lodged its first Mining Lease Application for Golden Ridge, advancing its larger development strategy.
The application includes a proposed processing site near grid power and all-weather sealed roads.
Flynn will also examine the longer-term concept of a low-capex plant at Golden Ridge producing high-grade gold concentrate for sale to Henty.
The company plans to provide Kaiser Reef with some of the quartz vein material collected from Golden Ridge for on-site testing in the coming months.
Development at Golden Ridge is ramping up in parallel with the Henty processing assessment.
Flynn’s work program includes flora, fauna and water surveys, resource drilling at the Brilliant and Trafalgar prospects, and further metallurgical studies tailored to potential Henty feed requirements.
The drilling program aims to grow the Golden Ridge Exploration Target and convert part of the mineralised system into a Mineral Resource.
Flynn is also working with stakeholders as it advances environmental, technical and regulatory workstreams.
Flynn’s broader portfolio provides additional projects that may be assessed under the Henty framework over time.
The company holds ten 100%-owned tenements in northeast Tasmania, prospective for gold, tin and tungsten.
Flynn also owns the Henty silver-lead-zinc project on Tasmania’s west coast and the Firetower tungsten, gold and critical metals project in the north.
