Southern Gold Ltd. has formally agreed with Metals X to finance and develop its Cannon Gold Resource 1 project pending Q1 2015 production, according to company officials. Metals X will fund and manage all mining, haulage and treatment via the nearby Jubilee Mill; the project lies 30 km from Kalgoorlie in Western Australia.
Southern Gold Managing Director Nanette Anderson called the agreement a company milestone. “The development will deliver strong cash-flows and provide a foundation with a longer term underground mine development,” she said.
Feasibility estimates 20,000 gold oz will be produced in the first phase of open-pit development from a total inventory of 68,000 oz. Cash flow will establish a second underground development phase while reimbursing costs incurred by Metals X; surpluses will be shared on a 50:50 basis.