Northwest Resources (ASX: NWR) has now moved to full ownership of two prospective projects in the Nullagine Goldfield of Western Australia, after acquiring the minority 35% interest for a consideration of 45 million shares.
Highlighting the potential of the Blue Spec Shear Gold-Antimony Project is the high-grade narrow vein nature of the gold mines and deposits, which have drawn comparisons to Northern Star's (ASX: NST) Paulsens and Silver Lakes Resources' (ASX: SLR) Daisey Milano.
At the project Northwest are targeting annual production of 65,000 gold ounces and 2,000 tonnes antimony in concentrate, with a base case for a 5 year mine life based on current Indicated and Inferred Mineral Resources and mining of Blue Spec historical remnants.
Initial studies indicate a 55% antimony concentrate containing on average 15 to 20 gold ounces per tonne can be produced, from a 250,000 tonnes per annum mill throughput producing around 3,500 tonnes of concentrate per annum.
Producing a concentrate has many advantages. Flotation is a standard process for refractory ores and gold & antimony float very well (90%+ recoveries to concentrate expected), with capital and operating costs lower than a CIL plant.
The Blue Spec remnants exploration target is based on the following conceptual ranges: Tonnes: 140,000 - 170,000; Grade: 8-12g/t gold & 1.8-2.6% Sb; Ounces: 36,000-65,000; Tonnes Sb: 2,500-4,400
There are plenty of opportunities though for Northwest in the shear, which include an increase in the Blue Spec lower grade zone, also extending Golden Spec at depth - and the intriguing thought of new discovers between the mines (see picture) or along the 14 kilometre shear.
Near term milestones at the project include engineering and capital cost studies in the September 2012 quarter, along with final feasibility studies and decision to mine before the end of the year.
Camel Creek Gold Project, production JV with Millennium Minerals
Not to be forgotten is Northwest's joint venture with Millennium Minerals (ASX: MOY) at Camel Creek, which is a 50:50 operation covering initially four deposits - Junction, Roscoes Reward, Little Wonder and Round Hill.
Importantly, no capital contribution is required from Northwest. The company can also add deposits to the joint venture with Millennium's agreement.
Millennium is managing the joint venture, and all ore mined as part of the joint venture will pass through Millennium's 1.5 million tonne per annum Golden Eagle treatment plant, which is currently under construction.
Joint venture ore sourced from the Northwest deposits, located about 6 kilometres from the Golden Eagle plant, will be blended with ore from Millennium's Golden Eagle deposit.
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