Five years ago Calidus Resources pulled off what many thought was an impossible task – the bringing together of multiple disparate parties who owned gold leases in the Pilbara within cooee of each other. Since then, Calidus has exquisitely executed a strategy of drilling out those leases, pulling together a resource and a reserve and this week, the company managed to achieve what many others could not – a maiden gold pour.
The initial pour comes from the gravity circuit while the real meat of production is to come from the elution circuit that is currently being commissioned. The first bar sourced from the leach circuit is expected to be poured next week.
Gold producers will typically run their ore through a centrifugal concentrator to separate out the gold recoverable by gravity before running it through the sequential leach and elution processes.
The company’s gold production is now scheduled to ramp up to about 90,000 ounces per year in stage one.
Calidus Resources Managing Director, David Reeves said: “With production underway and revenue being generated, we have begun to lay the foundations for ongoing growth.”
“Cashflow from Warrawoona will provide opportunities to increase production via the development of our Blue Spec deposit and help fund our highly promising gold and lithium exploration.”
The company began mining ore back in August 2021 and processing nine months later in April 2022.
However, its journey to production began nearly five years ago.
In mid-2017, Calidus shed its biotech skin and emerged as Perth-based gold explorer intent on growing its base of 410,000 ounces grading 2.2 grams per tonne gold into a standalone gold-production centre.
The company had early success in its maiden drill campaign at Warrawoona, delivering a 27m hit grading 5.85 g/t gold from 91m downhole.
As the program continued so did the high-grade hits with the explorer pulling out a 6m intersection running 63.31 g/t gold, containing a higher-grade piece of 2m grading 182.57 g/t gold.
By September 2017, through its efforts with the drill bit, Calidus had defined mineralisation along 2.6km of continuous strike and confirmed gold between the existing resources.
Shortly after, Calidus had teamed up with Novo Resources to farm into 70 per cent of the Canadian’s ground that surrounded its flagship Warrawoona project.
After more drilling and more gold intercepts, before 2017 had even closed out, Calidus had increased its mineral resource by 74 per cent from 410,000 ounces to 712,000 ounces of grading 2.11 g/t gold.
The explorer continued to run geophysical and geochemical sweeps over its ground along with infill and extension programs. The result was more high-grade hits along with a new discovery 150m north of its existing resource. Calidus coined the discovery St George Shear and saw it as a potential addition to its gold inventory.
On October 17 2018, the larger market-capped Alkane Resources decided to swoop in for an 8.8 per cent holding in Calidus as a strategic investment.
As infill and extensional drilling continued Calidus managed to “effectively triple” its resource base to 1.25 million ounces within 18 months of hitting the ASX boards.
The company branched out by acquiring another tenement holding prospective for high-grade gold in Marble Bar, 25km from its flagship project.
Halfway through 2019 the company released its pre-feasibility study into Warrawoona and found it to be a “robust gold project” with room for improvement.
The explorer then kicked off a drilling program aimed at expanding to mine life and was successful, reeling in –among others –a 1m hit going 107.16 g/t gold within a broader 13m at 11.1 g/t gold from a shallow 30m.
Turning into 2020, the explorer started to look more like a developer and producer. With a definitive feasibility study on the way, Calidus was gaining confidence in its project and purchased a 240-room accommodation village to support its work in the Pilbara.
The company also co-funded $2m into a $7m upgrade to the Marble Bar Airport with the Shire of East Pilbara.
Before commencing construction of the mine’s base infrastructure in September 2020, Calidus released an updated pre-feasibility study demonstrating “strong cash generation” and improved metrics.
Still in 2020, Calidus branched out further, securing rights to earn up to 70 per cent of the Otways copper-gold project, 50km from Warrawoona.
In September Calidus parted with $19.5m in cash to acquire the high-grade Blue Spec gold mine, located within trucking distance of Warrawoona.
The 219,000 gold-ounce addition offered the potential to grow the production and mine life of the company’s flagship project.
When Calidus tabled its definitive feasibility study into the Warrawoona project, it confirmed ”strong margins and cashflow”.
The project would require a capital expenditure of $120m and would produce a total of 658,000 ounces of gold, over a mine life of 8.3 years.
In pre-tax terms, Warrawoona was found to have a project cashflow of $629m, an average EBITDA of $110m per annum, a net present value of $308m and an impressive internal rate of return of 81 per cent – with a payback period of 13 months.
Along its pathway to the latest producer on the ASX-boards, Calidus also picked up a 50 per cent interest in the lithium exploration company Pirra Lithium, allowing the company to have some exposure to the battery metal de jour.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
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