Matsa signs mining services deal for Devon Pit gold mine
ASX-listed Matsa Resources has executed a binding mining services agreement with Blue Cap Mining (BCM) for the development of the Devon Pit gold mine, in Matsa’s Lake Carey gold project in Western Australia.
The agreement outlines a profit-sharing model in which BCM will manage and operate the Devon mine on an open-book cost basis. BCM’s return will be determined through a 20% profit share arrangement with Matsa. In addition, BCM’s private equity division, Blue Capital Equities (BCE), will provide up to A$6-million in working capital for the project.
Under the terms of the agreement, BCM will be responsible for the provision of mining equipment, personnel, and operational management. The mining services contractor will also defer 50% of its progressive service fees, up to a maximum of A$6-million, as part of its funding contribution. Once the project achieves positive cash flow, BCM will receive repayment of the deferred fees before sharing profits on an 80:20 basis with Matsa.
Matsa executive chairperson Paul Poli said the company is pleased to partner with BCM, highlighting its experience in openpit mining operations and its willingness to co-invest in the project.
“We are delighted with the appointment of Blue Cap as the mining contractor for the Devon Pit gold mine. Not only does Blue Cap provide the experience, technical services, and operational skill sets that the project requires, but they have also committed to partially funding mining operations and entering into a profit-sharing arrangement,” Poli said. “I look forward to working with the Blue Cap team once again, having previously collaborated successfully at our Red Dog opencut mine.”
With the agreement now in place, Matsa and BCM will begin preliminary site works, geotechnical and infill drilling, and dewatering activities in preparation for full-scale mining operations.
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