Lode-Star Mining has signed a toll milling agreement with Scorpio Gold affiliate Goldwedge LLC that allows for the processing of ore delivered from the Goldfield Bonanza project to the Goldwedge milling facility in Manhattan, Nevada.

Under the terms of the agreement, Lode-Star will advance funds required for the design engineering, permitting and mill modifications to allow for the ore treatment.

Based on previous metallurgical testing, the company’s ore requires gravity combined with flotation for optimal recoveries of contained precious metals. The 363 t/d Goldwedge milling circuit is currently configured with a gravity recovery circuit, so the modifications to the Goldwedge milling facility will include the addition of a flotation circuit, supporting reagent tanks/silos, secondary lining of process containment ponds, leak detection, and monitoring wells associated with fluid containments.

The agreement provides for Lode-Star to recoup the advanced funds through a reduction in toll milling rates until all advanced funds have been repaid. Following repayment, the toll charges will revert to standard rates, the company said.

This agreement is mutually beneficial for both parties, according to Lode-Star.

“With the addition of a flotation circuit, the Goldwedge milling facility will have the capability of processing carbonaceous/sulphidic ores, expanding its availability for toll milling.

“Lode-Star benefits from having a long-term processing agreement for their ores at a location operated by an experienced processing team. The mill is in close proximity to the company’s mine, thus minimising haulage costs, and will have a milling circuit optimised for peak metallurgical recoveries.”

Lode-Star President and CEO, Mark Walmesley, said: “This agreement couldn’t be more timely. After considerable work between Lode-Star and Scorpio Gold’s management, both parties agree each company will greatly benefit from this agreement.”

Walmesley said Lode-Star had completed its underground infrastructure improvement phase of over 800 m of drift at the 300 ft (91.4 m) level.

“The company’s next focus is the execution of a surface drilling program…and the continuation of our disciplined mine-ready underground development,” he said. “I believe with the company’s steady completion of its milestones Lode-Star is now well positioned to raise capital.”