PERTH (miningweekly.com) – ASX-listed Black Cat Syndicate on Tuesday revealed its restart plans for the Paulsens and Western Tanami gold projects, in Western Australia.

Black Cat last week struck a A$44.5-million deal with gold miner Northern Star to acquire the projects, under which Northern Star would be paid A$14.5-million in cash for the assets, and would be issued 8.34-million shares in Black Cat, at a deemed price of 60c a share.

The company would also be paid a A$15-million deferred consideration by the end of June next year, and a further A$10-million in cash in a series of contingent payments, linked to future production.

“This is a transformational transaction for Black Cat. We listed on the ASX in January 2018 with 80 km² of land, no resources and no mill. This transaction will have us at 1 770 km² containing more than two-million ounces at 2.5 g/t gold with two mills and a third well advanced,” said Black Cat chairperson Paul Chapman.

He noted that the vision for Black Cat was to become a midtier Western Australian gold producer, with three operations and a combined milling capacity of two-million tonnes a year, a resource of three-million ounces and a strong ore reserve, and a strong balance sheet and robust enterprise value.

Paulsens currently has a total resource estimate of 2.3-million tonnes, grading 2.7 g/t gold for 209 000 oz of contained gold, while Western Tanami, now dubbed Coyote, has a total resource estimate of 3-million tonnes, grading 5.4 g/t gold for 523 000 oz.

“The potential acquisitions could see us producing from three operations after we have rapidly grown the existing resources and announced ore reserves. We are targeting completion of feasibility studies at each operation followed by decisions to mine. The first decision to mine will likely be at Coyote in 2023,” said Chapman.

“At Paulsens we have allowed two years of drilling before a decision to mine. Ongoing developments, such as Kal East in 2026, are planned to be funded by internally generated cashflows.”

Chapman said that a decision was taken to defer the build of a planned processing facility at its own Kal East operation, given the current constraints on labour supply, engineering and construction materials around Kalgoorlie, which has been exacerbated by the Covid-19 pandemic.

“The Board remains fully supportive of Kal East, which will be ready to commence at the right time with all regulatory approvals now received, i.e. mining and milling at Kal East is now fully approved with the tailing storage facility just recently approved. However, in the interim, and in response to interest from a number of regional mills, we will be considering options to mine and toll treat the Myhree/Boundary deposits during 2022/23,” he said.

For 2022, Black Cat is aiming to undertake drilling at both Coyote and Paulsens to further underpin a restart plan at both operations. After a detailed engineering review, refurbishment activities are envisaged to begin at the Coyote processing facility in the latter part of the year.

Once the plant is operational, processing of existing stockpiles of 0.4-million tonnes, at 1.4g/t gold for 17 000 oz of gold can start during 2023, Black Cat said. Cashflow from treating the stockpiles has the potential to recover the cost of the processing facility refurbishment and represents a lead-up to the resumption of mining at Coyote.

In 2023, drilling will remain ongoing at Coyote and mine planning activities will culminate in studies upon which to make a decision to mine in 2024.

Drilling campaigns at Paulsens and Kal East will also continue adding openpit and underground mine life.

Following the decision to mine and granting of approvals at Coyote, stockpile processing is planned to transition to openpit material by 2024. If additional capacity is required, Black Cat’s smaller 700 000 t/y mill and surplus tanks at Kalgoorlie can be relocated to expand the milling capacity at Coyote, the company said.

Paulsen drilling and mine planning activities will deliver studies during 2024 which will be the basis of a decision to mine during 2025.

A low capital and low risk restart is planned for early in the year at Paulsens for 2025. Using the anticipated cashflow from Coyote and Paulsens, construction of the proposed 800 000 t/y processing facility at Kal East is planned to start once Paulsens is in steady state operation.
 

From 2026 onwards, Black Cat plans to commence underground mining at Coyote in parallel with ongoing production from Paulsens and Kal East.