Two of MACA Limited’s subsidiaries look set to carry out open-pit mining and refurbish the mill at Echo Resources’ Yandal gold project in Western Australia.

MACA said a letter of intent (LoI) had been signed that could see MACA Mining awarded an open-pit mining services contract and MACA Interquip receive a mill refurbishment contract.

These two contracts hinge on the Echo Board of Directors proceeding with an investment to develop Yandal and the project receiving all statutory approvals.

The scope of work to be undertaken under the mining contract will include load and haul, and drill and blast, with the pricing of the agreement to be updated (using the same inputs as tendered, adjusted for rise and fall) based on the final Yandal mine plans from a bankable feasibility study (BFS).

The mill contract is to include refurbishment and commissioning. MACA said: “While final pricing is to be determined under the aforementioned methodology, the previously released BFS for Stage 1 estimated mining costs at A$172 million ($124 million).”

Yandal, located 83 km northeast of Leinster in Western Australia, will treat ore through the 2 Mt/y Bronzewing processing plant (pictured), which is currently on care and maintenance. The project has existing mineral resources of 1.7 Moz of gold and ore reserves of 856,000 oz. The previously released BFS for Stage 1 envisaged the development of an 1.8 Mt/y operation able to produce 746,000 oz of gold over an eight-and-a-half-year life.

In addition to this LoI, MACA said, following mobilisation and early site establishment activities at the Bluff coal project in Queensland, Australia, mining of overburden would commence on or around December 10. MACA was previously awarded a A$700 million life of mine contract at Bluff from Wealth Mining.