The deal covers 225,000 tonnes per annum at $US80 ($A110) per tonne free-on-board (FOB) and has been signed with industrial mineral distributor Talana.

It will provide significant by-product revenue, and is expected to cut C1 costs at Mount Morgan by 62% to $260 an ounce.

All-in sustaining costs for the project, which aims to retreat historical stockpiles, remain steady at $234/oz.

The deal effectively replicates historical activities at Mount Morgan, where there were significant pyrite exports during the 1970s.

Pyrite is used as a source of sulphur for making sulphuric acid, which in turn is used for making fertiliser.

“The agreement also has significant environmental benefits with the removal of pyrite from the mine site eliminating the source of state-owned environmental legacy issues,” Carbine said.

“This process will greatly assist in the progressive rehabilitation of the mine site and Dee River, which runs alongside.”

Price negotiations under the contract will take place each year, with 90% paid at the mine gate and the final 10% FOB.

The cost of trucking and port handling was estimated at about $20/t, though that figure could come down once operations start and the logistics chain is optimised.

Carbine said it was exploring the potential for further pyrite exports up to 1Mtpa, and final talks for copper concentrate offtake was still ongoing.

Carbine shares were up 19% following the announcement.