WPG cuts costs at Tarcoola development
PERTH (miningweekly.com) – A revised definitive feasibility study for the development of the Tarcoola gold project, in South Australia, has significantly reduced the expected capital costs, ASX-listed WPG Resources reported on Thursday.
A 2015 feasibility study estimated that the project would require a capital spend of A$16.7-million to support production of 20 000 oz/y of gold, over a mine life of three years.
However, the updated feasibility study has now decreased the capital expenditure to A$4-million by trucking Tarcoola ore to the Challenger gold project for treatment at an established plant, rather than the original heap-leach option considered in the 2015 study.
The project is expected to have a mine life of two years, and a treatment period of three-and-a-half years, with yearly production still set at 20 000 oz.
WPG noted that the treatment of the Tarcoola ore through the Challenger plant would result in substantially increased gold recovery, estimated to be at around 95%, compared with the 81% for the original heap-leach option.
“The results of this updated feasibility study adds much weight to our decision to acquire our former joint venture partner’s 50% interest in Challenger, because there will now be no need to negotiate a potentially costly and value-destructive toll treatment arrangement. Instead, ore will be treated at cost at Challenger, in exactly the same way as ore from the underground mine is treated,” said WPG executive chairperson Bob Duffin.
He noted that the reduced complexity and substantially decreased capital expenditure for the project’s development meant that WPG was able to fund the project from existing cash resources without having to investigate alternative funding options.
“In addition, the all-in sustaining costs are lower than for the heap-leach option, and this will reduce the all-in sustaining costs for the combined Challenger-Tarcoola project taken as a whole.
“The overall results for the feasibility study are substantially enhanced and provide significant leverage to the gold price, with increased certainty of gold recovery through the Challenger plant. The result supports our strategy that combining synergies of our projects in the Gawler Craton incrementally increases the inherent value of the company.”
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