ASX-listed aspiring gold developer Bardoc Gold has pivoted towards front-loading gold production and cash flows into the first five years of its proposed stand-alone Bardoc mining and processing operations about 40km north of Kalgoorlie in WA. The Perth-based company says it has kicked off a cash-flow optimisation study that will run the numbers over increasing the projected annual gold production rate, margins and free cash flows across the first five years of Bardoc’s forecast life of mine.
Central to the revised operational plan is the bringing forward of both the construction of a planned flotation circuit to the front end of the project’s processing plant construction phase and the exploitation of the cornerstone Aphrodite deposit in the mine schedule.
Bardoc says preliminary analysis indicates having the flotation circuit in place right off the bat will pave the way for earlier gold production from the Bardoc project’s “highest value” Aphrodite deposit and therefore significantly increase gold output from years one to five.
As part of the pivot strategy, the proposed 2.1-million-tonne-per-annum processing facility will be built at Aphrodite, rather than next to the Zoroastrian and Excelsior deposits about 35km to the south.
According to the $114 million market-cap company, the Aphrodite plant location option offers the opportunity to not only extract further value from Aphrodite but also down the track from the “highly prospective” Omega, Sigma and Gamma lodes.
Bardoc says recent exploration success at Omega, Sigma and Gamma points to the potential for significant resource growth.
It suggests the additional up-front capital expenditure required to bring forward construction of the flotation circuit, which is designed to treat base-load ore from Aphrodite, will be partially offset by other infrastructure cost reductions.
Additional higher-grade ounces in the early years will also beef up free cash flows in the first five years of the simpler mine plan.
An update on the proposed project development is slated to be released at the end of this month.
The latest published indicated and inferred open-pittable and underground mineral resource estimate for Aphrodite stands at 25.5 million tonnes grading an average 2 grams per tonne gold for 1.66 million ounces of contained gold.
Aphrodite speaks for around half the Bardoc project’s global multi-deposit mineral resource inventory of 54.59 million tonnes at an average grade of 1.8 g/t for 3.07 million ounces of contained gold.
Latest stated overall probable reserves weigh in at 15.87 million tonnes going 2 g/t for one million ounces of contained gold, with Aphrodite weighing in at more than half of the ounces.
Bardoc hopes the cash-flow optimisation study will improve on an already robust definitive feasibility study or “DFS” on Bardoc.
The DFS, which Bardoc tabled about four months ago, shows the new mine churning out average free cash flows before tax of $113 million per annum “post-construction”.
The scintillating free cash flows were predicated on gold production at Bardoc totalling 1.1 million ounces over an initial mine life of about 8.2 years – or an average of about 135,000 ounces per annum – and a gold price of $2,250 an ounce.
In the DFS, all-in sustaining costs of gold production were extrapolated to average an impressive $1,188 an ounce across the life of mine.
Pre-production CAPEX for the proposed development has been put at $177 million and the capital payback period at 32 months from production start-up.
Based on the DFS projections, the planned new conventional CIL processing plant incorporating the flotation circuit accounts for about $104 million of the total capital costs.
Management says the potential advantages of the pivot strategy became apparent during DFS optimisation work, engagement with EPC contractors and following the company’s recent exploration success.
Bardoc Gold Chief Executive Officer Robert Ryan said: “The revised mine plan allows us to bring forward ounce production in the mine plan. This enhances project economics, which will allow the company to repay debt earlier and expedite returns to shareholders.”
“This allows for earlier production from our highest value deposits at Aphrodite, while also opening up the opportunity to exploit the exciting new discoveries we have made at Omega, Gamma and Sigma.”
Bardoc says it is closing in on project financing and a final investment decision before the end of the year with a view to commencing the main construction stage and open-pit mining in the March quarter early next year.
The Bardoc project area takes in about 250 square kilometres within the prolific Norseman-Wiluna greenstone belt at the junction of the Bardoc Tectonic Zone greenstone sequence and the cross-cutting Black Flag Fault system, two deep-seated crustal structures that host a cast of multimillion-ounce gold deposits.
In 2017-18, Bardoc Gold merged with fellow ASX-listed gold explorers, Aphrodite Gold and Excelsior Gold.
The key projects of the merged entity – Aphrodite, Kalgoorlie North and Mulwarrie – were collectively renamed Bardoc, reflecting the enviable landholdings of the combined project area along the Bardoc Tectonic Zone.
Two years ago, the company expanded its near-Kalgoorlie land position with low-cost complementary acquisitions including a contiguous tenement package from Torian Resources in and around the Bardoc project.
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By Matt Birney
