ASX-listed aspiring gold producer, Calidus Resources, has moved to top up its coffers with a heavily oversubscribed $31.8 million share placement to institutional and sophisticated investors and an additional $5 million placement to eligible existing shareholders.
The capital raises come hot on the heels of the Perth-based company securing $110 million in debt funding from Macquarie Bank for its planned Warrawoona gold mining and processing operation currently in the initial development stages.
As a condition of the debt financing, Calidus has locked 125,000 ounces into a gold hedging facility to mitigate future gold-price risk. Based on its definitive feasibility study, or “DFS” on the project, the forward sales figure represents 19 per cent of total estimated gold production from Warrawoona – of 658,277 ounces over an initial life of mine of 8.3 years – at a net achieved price of $2,355 an ounce.
In what Calidus describes as a strong technical validation of the Warrawoona project, Macquarie has also taken up a cornerstone $5 million slice of the latest capital raise to become a significant Calidus shareholder.
Calidus Resources Managing Director, Dave Reeves said: “This highly successful capital raising means we are now fully funded to build Warrawoona and start production. The recent order … for our SAG mill has set the construction schedule and we are set to start main construction work in the March quarter of 2021, pending final regulatory approvals.”
Calidus, which also raked in $25 million from a capital raise in July, has estimated a CAPEX of $120 million for Warrawoona, 20 kilometres south-east of Marble Bar in WA’s East Pilbara region.
The recently completed DFS shows gold production at Warrawoona averaging 90,000 ounces per annum over the first seven years of the initial mine life of 8.3 years, peaking at 105,000 ounces in year five. All-in sustaining costs of production are envisaged to average $1,290 an ounce.
Under a received gold price scenario of $2,500 an ounce, the DFS pre-tax forecasts include free cash flows of $629 million or $75.7 million a year, average EBITDA of $110 million per annum, a net present value of $408 million and an internal rate of return of 81 per cent. Project capital payback stands at an impressive 13 months.
Corresponding after-tax forecasts include free cash flows of $447 million or $53.8 million a year, an NPV of $286 million and an IRR of 69 per cent.
Projections in the Warrawoona DFS do not include possible satellite ore feed from the historic high-grade Blue Spec gold project that Calidus is in the process of acquiring from TSX-V-listed Novo Resources in staged payments, to which the capital raises will contribute.
Blue Spec, which is located about 70km south-east of Warrawoona, hosts an inferred and indicated mineral resource of 415,000 tonnes grading 16.35 grams per tonne for 219,000 ounces of contained gold.
Calidus says it has commissioned a scoping study on Blue Spec that is slated to be finished in the March quarter next year.
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By Matt Birney
