PERTH (miningweekly.com) – A feasibility study on the Warrawoona gold project, in the Pilbara, has estimated that the project would require a capital investment of A$120-million, ASX-listed Calidus Resources said.
The feasibility study estimated that the project would produce an average of 90 000 oz/y over the first seven years, peaking at 105 000 oz/y in the fifth year of operation, with gold production to reach 658 000 oz over the eight-year mine life.
Life-of-mine all-in sustaining costs have been estimated at A$1 290/oz, while the project is expected to generate pre-tax cash flows of A$629-million and average annual earnings before interest, taxes, depreciation and amortisation of A$110-million.
The pre-tax net present value has been estimated at A$408-million, with the project’s internal rate of return estimated at 81%.
“The feasibility study confirms the significant technical and economic strength of Warrawoona. The project is set to generate substantial cashflow based on low costs and robust margins and underpinned by extensive reserves in a Tier 1 location,” said MD Dave Reeves.
“The strong results of this study pave the way for us to complete debt funding in the coming quarter and start main construction early next year.”
Early work has already started at the Warrawoona project, with Calidus tapping contractor Macmahon Holdings as the preferred mining services provider. Main project construction is scheduled to start in the March quarter of next year, to capitalise on the strong gold price.
Final approval from the Environmental Protection Authority has been received and the project is on track to be fully permitted by the end of the year.
Reeves said that while construction was under way next year, Calidus would finalise integration plans for the nearby high grade Blue Spec mine, which the company had agreed to purchase.
“The acquisition has strong potential to significantly increase Warrawoona’s total production and cashflow by leveraging the Warrawoona infrastructure.”