Shock setback for gold mine west of Casino
Plans to progress a gold and silver mine west of Casino have hit a major hurdle.
White Rock Minerals is developing the project at Mt Carrington, near Drake.
In October, the company announced it had entered into an agreement with Koala Metals to operate it as a joint venture.
But less than two months later, that deal collapsed.
According to White Rock Minerals' ASX statement last month, "Koala Metals has notified White Rock that it is incapable of meeting the conditions to closing under the Term Sheet and accordingly has withdrawn from the Term Sheet".
"While White Rock acknowaledges that Koala Metals is unable to proceed with the transaction as outlined in the Term Sheet, it looks forward to exploring other opportunities in relation to advancing the Mt Carrington project, especially in this very strong gold and silver price environment," the statement explained.
Under the planned agreement, Koala Metals would have funded the advancement of the Mt Carrington gold and silver project by completing the Definitive Feasibility Study and the Environmental Impact Statement.
This would have included a community consultation phase.
Koala Metals would have earned 30 per cent of the Mt Carrington asset in stage one.
This could have increased up to 70 per cent by stage three.
In October, White Rock Minerals' managing director and chief executive, Matt Gill, said they were "extremely pleased to partner with Koala Metals".
"Securing a quality partner to advance Mt Carrington is a key step in White Rock's strategy to unlock the value in our three projects; the Mt Carrington gold-silver project and our two Alaskan projects," he said at the time.
Gold was discovered at Mt Carrington in 1886.
An updated pre-feasibility study for the site declared an ore reserve of 4.1 million tonnes at 1.3g/t gold for 174,000 ounces gold from within an overall mineral resource of 352,000 ounces gold.
There is also a silver mineral resource, estimated at 23 million ounces.
The gold pits are pre-stripped and there is considerable existing infrastructure including a tailings storage facility, freshwater dam, mining leases, access to state grid power and site office.