WCB Resources and Kula Gold will bring their Misima and Woodlark projects together as part of a non-binding memorandum of understanding (MOU).
The companies are exploring the possibility of a joint venture which will bring together WCB’s Misima gold project and Kula’s Woodlark Island gold project, both located in Milne Bay province, Papua New Guinea.
Initially, the two companies will explore the synergies between Misima and Woodlark with a view to maximising the value of both projects, WCB and Kula said.
“The boards of both companies believe that there is potential for significant upside in a joint development of the two gold projects,” a joint statement said.
The projects close proximity and the potential benefit of barging ore from one island to the other for processing in a single larger Carbon in Pulp/Carbon in Leach (CIP/CIL) plant, providing economies of scale were flagged by the companies as key factors in this decision.
The MOU forms the framework under which the companies will work together to explore the technical and commercial benefits of a joint development.
In a joint statement, the companies confirmed the MOU is not exclusive and allows the WCB and Kula to independently progress the development of their projects.
WCB Resources chief executive Cameron Switzer said the potential combination of the Misima gold project and the Woodlark Island gold project could lead to greater commercial returns than would the sum of the individual projects.
“The concept incorporates the barging of ore from Woodlark approximately 170 kilometres south to Misima,” Mr Switzer said.Kula Gold chairman David Frecker said he sees the MOU as a logical step.
“The economies of scale may be the catalyst for the development of both projects, particularly in the current low cost environment where costs have materially reduced for plant, equipment, energy and labour.”
“If this combined development is successful it will deliver a larger gold project with expected economies of scale,” Mr Frecker added.