Forrestania Resources has secured the right to buy and process up to two million tonnes of gold ore from MEGA Resources over the next two years, strengthening plans for regional processing hubs in Western Australia.
The agreement is supported by a separate five-year master services deal under which MEGA will become a preferred provider of open-pit mining, drill-and-blast and other mining support services.
Ore will be supplied in campaigns of between 50,000 and 150,000 tonnes and can be processed at either Forrestania’s Lake Johnston or Edna May plants. The company will take ownership when the material is delivered and retain the gold recovered through processing.
Pricing is based on a formula using a benchmark of $155 a tonne, an ore grade of 1.43 grams of gold per tonne and a processing recovery rate of 91 per cent.
The first material is expected to come from stockpiles at the Taipan open pit, which is operated by MEGA Resources.
Forrestania said the master services agreement was designed to allow mining support to be deployed quickly, without the need to negotiate a complete contract for each future project.
David Geraghty, Forrestania’s executive chairman, said the agreements created a commercial framework for sourcing and processing third-party ore while giving the company greater flexibility as it prepared to restart its operations.
“The execution of both the Ore Purchase Agreement and Master Services Agreement with MEGA Resources represents another important step in advancing Forrestania’s processing hub strategy and restart readiness initiatives,” he said.
Refurbishment of the Lake Johnston mill, which has capacity of 3.2 million tonnes a year, is expected to be completed by the end of 2026. Forrestania is also preparing the 2.8-million-tonne-a-year Edna May plant for a planned restart in 2027, with replacement mill liners among the long-lead items ordered for delivery in November.
The MEGA arrangement follows a similar agreement with First Au covering up to a further two million tonnes of third-party ore from its nearby Gimlet project. Together, the deals provide Forrestania with potential feed for its processing network in the Southern Cross-Kalgoorlie gold district.
Forrestania said its wider resource estimate stood at 58.6 million tonnes grading 1.1 grams of gold per tonne, equivalent to 2.08 million ounces. It has also agreed a five-year sodium cyanide supply contract with Orica, alongside haulage and laboratory-services arrangements, as it moves towards operating the two processing hubs.
