The Ghana gold mine of beleaguered Singapore firm LionGold has inked a deal to acquire and process gold-bearing waste tailings from an Australian-registered firm, B&C Gold.
Over three years, Owere Mines will purchase a minimum of one million dry metric tonnes of tailings from B&C, which has an environmental clean-up arrangement with the local councils in Ghana.
Production of gold from the tailings is expected to start in March next year, said LionGold in a statement on Thursday morning.
LionGold owns a 77 per cent interest in Australian-listed Signature Metals, which in turn has a 70 per cent stake in Owere Mines.
"Income generated through the production of gold from purchased tailings would fund exploration activities at our 1.47 million ounce resource Konongo Gold project," said LionGold group chief executive Nicholas Ng.
Owere Mines wholly owns the Konongo Gold project.
The agreement with B&C will allow Owere Mines to fully use its existing processing plant, which has been put on hold since March this year. The plant has an annual processing capacity of 320,000 tonnes of ore.
Gold-bearing waste tailings are waste materials from old gold mining operations and are potentially hazardous to the environment and health of the nearby communities if the waste leaches into ground water.
Companies such as Owere Mines have developed techniques to reprocess these tailings to recover additional minerals, LionGold said.
LionGold is one of three penny stocks that saw their share prices swing wildly in early October, leading the Singapore Exchange to impose trading curbs on the counter.
It closed at 17.8 cents on Wednesday, a far cry from a high of $1.725 reached on August 29 this year.