11:31 AM EST, 12/12/2024 (MT Newswires) -- Westgold Resources ( WGXRF ) , down 5% at last look, late on Wednesday said it executed a gold ore purchase agreement between its subsidiary Big Bell Gold Operations and Zeus Mining, owned by Australia-listed New Murchison Gold (NMG).

Under the deal terms, Westgold will buy 30,000 to 50,000 tonnes of gold ore per month from NMG's planned open pit operation at it Crown Prince project in Australia.

A statement noted that Crown Prince, located near Westgold's Bluebird processing plant, has an indicated and inferred mineral resource of 2.21 million tonnes at 3.9 grams per tonne of gold for 279,000 gold ounces.

NMG aims to start open pit mining in mid-2025, when the purchase agreement will also begin. Most of the Crown Prince ore is expected to be processed in the first two years of the agreement, with potential ongoing terms to be agreed on a rolling, quarter-by-quarter basis.

"The introduction of softer oxide ore from Crown Prince in FY26 effectively increases throughput

at the Westgold's Bluebird plant -- growing production and reducing our cost per ounce," said Westgold Managing Director Wayne Bramwell. "At the same time, NMG realise value for its shareholders by unlocking a pathway to production for its Crown Prince deposit without the capital impost and execution risk of building a processing plant."

The deal remains subject to NMG shareholder approval as Westgold owns 18.7% of NMG.

Westgold shares were last seen down $0.135 to $2.675 on the Toronto Stock Exchange.

Price: 2.68, Change: -0.14, Percent Change: -4.80