First Au Ltd. has entered into a binding ore purchase agreement with Western Australian producer Forrestania Resources Ltd., securing a commercial processing and monetisation pathway for its Gimlet gold project.
The agreement establishes a framework for Forrestania to purchase and process gold-bearing ore from FirstAu’s Gimlet deposit.
By leveraging established infrastructure, FirstAu bypasses the heavy capital expenditure and lengthy development timelines required to construct a standalone processing plant.
Potential processing hubs under the deal include Forrestania’s Lake Johnston facility and its Edna May operations, subject to Forrestania completing its acquisition of the Edna May asset.
FirstAu Executive Chairman Daniel Raihani described the deal as a vital step in unlocking value from the company’s gold portfolio.
“For junior gold companies, access to processing infrastructure can be one of the most significant barriers between defining mineralisation and ultimately generating value from it,” Raihani said.
“This agreement provides FirstAu with a potential pathway to monetise suitable ore without the substantial capital cost and development timeframe associated with constructing our own processing facility.”
The agreement spans an initial 24-month term following the satisfaction or waiver of several key conditions precedent, which must be met by September 7, 2028.
Conditions include Forrestania declaring its processing plant ready, FirstAu making a formal board decision to mine at Gimlet, and FirstAu securing all relevant environmental and operational permits.
Upon execution, FirstAu will pay a AU$50,000 plant access fee. Purchases will feature formula-based pricing factoring in base treatment costs, ore grades, metallurgical recovery rates, and market gold prices. The commercial arrangement is tied to a gold price collar of between AU$5,250 and AU$7,250 per ounce.
FirstAu will retain exclusivity obligations during the term, preventing it from supplying ore above 1 grams per tonne to third parties without offering Forrestania first right of refusal. FirstAu will remain responsible for haulage to the designated run-of-mine pad.
The company intends to continue advancing the Gimlet Project with the objective of identifying mineralisation capable of meeting the technical and commercial requirements for potential processing under the agreement with Forrestania.
