PERTH (miningweekly.com) – A preliminary expansion study at the Matilda/Wiluna gold project, in Western Australia, has proved positive for owner Blackham Resources.

The preliminary expansion focused on the Wiluna sulphides and their integration with the current free milling ores at Matilda and Wiluna. Likely to be developed in two stages, over an 18-month period, the expansion will ramp up production at Matilda/Wiluna to over 200 000 oz/y, up from the current capacity of some 98 000 oz/y.

The first stage of the expansion will be the refurbishment of the current sulphide treatment plant and the construction of a new float and carbon-in-leach circuits, estimated at a capital cost of A$24.9-million.

The second stage expansion will see the construction of a new crushing and grinding circuit to increase throughput capacity by about 1.5-million tonnes a  year and will cost a further A$79-million.

On the completion of the second stage of the expansion, it is envisaged that the treatment of free-milling ore will restart, allowing for the two processing facilities to run in parallel, with a total capacity of 3.2-million tonnes a year.

“The Wiluna expansion plan aims to achieve a step change in gold production from the 6.4-million-ounce resource at the Matilda/Wiluna operation,” Blackham MD Bryan Dixon said on Monday.

“The preliminary expansion study has confirmed gold production of 200 000 oz/y is achievable on a very capital efficient basis and is likely to be a long-life mine. By undertaking a staged development approach, the company expects to maintain a strong balance sheet during the Stage 2A refurbishment and construction, plus, on the completion of Stage 2B, to run the sulphide and oxide circuits in parallel, providing one of Western Australia’s most flexible gold processing facilities.”

The expanded operation is expected to deliver about 1.31-million ounces of gold over a mine life of nine years, at all-in sustaining costs of about A$1 170/oz.

Blackham told shareholders that the company was mindful of matching the Stage 1 operating cash flow to the Stage 2 capital requirements, adding that commitment to the expansion plan would be done at the earliest opportunity that the balance sheet allowed.

The company has also appointed a financing adviser to start engaging with potential debt providers, with a view to resize its current A$39-million debt facility.

In the meantime, a feasibility study on the expansion plan will be advanced, which will likely be completed by the December quarter.