Development of ASX-listed Calidus Resources’ Warrawoona gold operation in Western Australia has been progressing at “a rapid rate” as it looks to kick off preliminary mining in the middle of this year with an eye on pouring first gold in the first half of next year. The Perth-based company says construction at Warrawoona, which has an estimated CAPEX of $120 million, remains in line with budget and schedule.
Calidus says it has committed about one-quarter of the engineering, procurement and construction contract value of about $75 million and it expects commissioning of the new gold processing plant to take place in less than 12 months.
Construction continues to advance at a rapid rate since clearing of the processing plant area commenced at the end of February. The critical path area, being the CIL tanks is on track, with the concrete ring beams poured and the tank fabrication due to commence in May.
The company also anticipates the first drawdown from its recently finalised $110 million Macquarie Bank debt facility later this month or early next month.
Calidus recently unveiled an “integration” scoping study on incorporating the newly acquired Blue Spec high-grade satellite underground gold deposit into the production mix at Warrawoona, which sits about 25km south-east of Marble Bar in the East Pilbara region.
The study indicates the addition of ore feed hauled from Blue Spec will raise the annual gold production at Warrawoona to an average of 110,000 ounces per annum over the first seven years of mine life, up from 90,000 ounces per annum without it.
Pre-tax free cash flows from the Warrawoona gold processing hub come in at $662 million or $82.75 million a year for the initial projected eight-year mine life when including Blue Spec’s contribution.
Forecast all-in sustaining costs of gold production remain steady at an estimated $1,292 an ounce.
Warrawoona’s centrepiece Klondyke deposit currently contains just under 14 million tonnes of probable open-cut and underground ore reserves at an average grade of 1.2 grams per tonne for 521,000 ounces of contained gold.
An overall open-pittable and underground measured, indicated and inferred resource estimate for Klondyke of 42.3 million tonnes of ore going 1.02 g/t for 1.4 million ounces of contained gold takes in the reserves.
Blue Spec, approximately 70km from Warrawoona, hosts a remnant inferred and indicated mineral resource of 415,000 tonnes of ore grading a sterling 16.35 g/t for 219,000 ounces of contained gold.
Calidus envisages trucking Blue Spec underground ore to Warrawoona for treatment at its planned parallel sulphide processing circuit, reducing CAPEX required to bring Blue Spec on stream and leveraging off Warrawoona’s infrastructure.
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