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PERTH (miningweekly.com) – A restart study into the Paulsens gold operation, in Western Australia, has estimated that it will require a capital investment of A$34.3-million to bring the project back into production.
ASX-listed Black Cat Syndicate said on Monday that the restart study estimated an initial production target of 136 000 oz, at 4.2 g/t gold, with head grade in the top ten for Australian gold producers.
The project is expected to recover 42 000 oz/y, over an initial three years, with significant potential to increase the yearly production rate. First gold from the operation could be produced within six months from the start of process plant refurbishment, with the project expected to have a pay-back period of 14 months.
Paulsens was expected to generate revenues of around A$355.9-million, with the project estimated to have an internal rate of return of 75% at a gold price of A$2 900/oz. The study also estimated an all-in sustaining cost of A$1 892/oz.
“The Paulsens restart study provides rapid cashflow, with low restart capital and a short ramp-up period to first gold poured. Pleasingly the attractive internal rate of return of 75% and payback period of 14 months reflects current market conditions in Western Australia, which have been fully factored into the restart study,” said Black Cat MD Gareth Solly.
“Paulsens has historically been operated with an average mine plan of 2.5 years, as such, the restart study, with mine life of approximately three years, forms an excellent base to start and then grow operations. Once restarted, Paulsens will have tremendous strategic value being the only gold processing facility within a 400 km radius. Initial cashflow from Paulsens will be applied in the first instance to increasing life-of-mine through near-mine extensions as well as the Apollo, Belvedere and Mt Clement deposits, before testing regional targets.
“Once we have achieved steady-state operations and increased the Paulsens oM, we will turn our attention to building our other regionally strategic processing facilities, located in Western Australia’s Tanami region at Coyote and east of Kalgoorlie at Kal East,” said Solly.
“Importantly, Paulsens has all the required environmental and native title approvals in place to commence development. All medium and large ticket items have been quoted and contract negotiations with suppliers are well advanced. An experienced refurbishment crew is available to commence site works shortly after contract execution and we have a clear pathway to deliver first gold in 2024. We are also well progressed for funding with Australian and US debt providers, with indicative term sheets already received. Black Cat’s decision, on whether to restart Paulsens, is expected to be announced imminently.”