Malaysia-focused gold producer Monument Mining has entered into a binding oxide magnetite purchase and profit-sharing agreement with Malaco Mining, in a bid to acquire certain over-burden top soils on the Mengapur project and the production of magnetite from these soils.
The Mengapur project is located in Central Malaysia in the state of Pahang, and was initially discovered by a drilling programme carried out by the geological survey of Malaysia.
The previous vendor of the Mengapur project, Malaco, currently holds the rights to oxide magnetite material contained in top soil over-burden on the project, including areas A, B and C of the project.
Malaco's top soil magnetite operation on areas A and B have been managed by Monument since September 2012, through its wholly-owned subsidiary Monument Mengapur (MMSB), which exclusively operates the Mengapur project.
According to the mine plan, Malaco has confirmed MMSB's previously-granted right to access, extract, process and sell the oxide magnetite materials on the area C over-burden, as per the terms of the deal.
The company also agreed on a profit-sharing arrangement for that over-burden material.
Malaco will receive a share of profit up to $5.00 per tonne of area C marketable grade magnetite delivered and sold by MMSB at the near-by Kuantan port, under the profit-sharing arrangement.
Monument president and CEO Robert Baldock said the acquisition will enable the company to turn over-burden costs into a potentially profitable operation and add value to the project.
"The removal of stockpiled material and over-burden would represent a large portion of upfront mine development and operation costs on the Mengapur project, as the over-burden would need to be removed before hard rock open pit material could be accessed for mining," Baldock said.