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Wiluna ramps up gold production as costs trend down

Wiluna Mining Corporation is ramping up production and pushing its unit operating costs down at the Wiluna Gold project. The company poured 13,360 ounces of gold during the September quarter, delivering monthly operating cash flows of around $4m. The production figures represent an 18 per cent uplift on the June quarter gold production and a welcome upwards trajectory for the once troubled project.

The company has also managed to reduce the all-in-sustaining-cost per ounce produced by 38 per cent for the quarter to AU$2,012 an ounce, with the downward trend looking set to continue in the current quarter.

Management said it was maintaining its production guidance of 62,000 ounces for the year at an AISC of AU$1,950 per ounce, with a C1 cash cost per ounce of just A$1,650 per ounce. Those numbers appear to stand up well against the Perth Mint’s spot gold price today of around AU$2,700 per ounce.

The company already has a healthy hedge book with a significant proportion of gold sales revenues locked in at an average price of AU$2,674 per ounce.

It looks set to continue to churn out 5,000 ounces of gold per month for the remainder of the current financial year ahead of the start-up of the planned sulphide concentrate production in October next year. The mill will be fed by free-milling ore coming out of the Williamson pit and fresh ore from the Golden Age and Lennon underground mines.

Wiluna’s board recently pushed the go button on the first stage of its sulphide concentrator development program that is targeting annual gold production of around 100,000oz.

The Wiluna gold operation represents Australia’s seventh largest, single owner gold district and the Wiluna Mining Centre boasts a total mineral resource of 53Mt at 3.0 g/t for 5.1Moz of contained gold, using a 1.0 g/t cut-off.

Recent “under the headframe” high-grade gold intercepts not covered in the latest resource update include underground hits of 4m at 17.47 g/t gold from Essex, 3.85m at 9.30 g/t and 9.45m at 8.7 g/t gold at Calvert and 4m at 17.67 g/t gold from the East Lode. Multiple hits were also recorded at the Bulletin lode, including 19.56m at 6.15 g/t gold, 12m at 12.08 g/t, 12m at 7.29 g/t and 10m at 7.21 g/t gold.

During the quarter the Company took positive steps towards securing strong transitional cash flows to support sulphide development and commissioning of concentrate production aimed for October 2021. Our current free-milling operations have been de-risked significantly via the build-up of high-grade stockpiles from the Williamson mine and margins are expected to increase as the Company’s operating cost base trends lower.

Most importantly, the Company continued to make in-roads into solidifying its immediate sulphide development plans with the Board approving the construction of the concentrator. Exceptional drilling results are continuing to be achieved in high priority target areas at the Wiluna Mining Centre. Additionally, the Company’s updated Mineral Resource Estimate confirms the geological significance of the Wiluna Mining Centre and the Company is eager to continue to define the large-scale geological potential as part of becoming a Tier 1 producer in a Tier 1 jurisdiction.

The company’s Wiluna gold project is located in the north-eastern Goldfields of Western Australia. Its ground holdings in the region cover a strike length greater than 75km across the revered Wiluna-Norseman greenstone belt.

The Wiluna mine has a long history of production, dating back more than 100 years, with over 4 million ounces having already been picked from the gold-rich greenstones within this auriferous terrane.

Is your ASX listed company doing something interesting? Contact: matt.birney@wanews.com.au

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