Calidus ploughs into WA gold plant construction

Calidus Resources is barrelling towards production at its Warrawoona gold project in the Pilbara having received governmental approval for its mining operation. The company is now permitted to move into production and has commenced bulk earthworks across the proposed plant site.

The company has also placed orders for all of the long lead items required for the milling operation, including the crushing and grinding circuit, with the heavy equipment scheduled to begin arriving on site early in the second half of 2021.

Calidus had previously received approval to begin some early stage works at Warrawoona and has already put in place access roads, a bore field to supply water and communications and is expected to put the finishing touches on its 240-person mine camp in the coming weeks.

Calidus Resources Managing Director, Dave Reeves said: “Construction of Warrawoona is fully-funded and we are on schedule to pour our first gold as planned in the first half of 2022.”

“Our feasibility study shows Warrawoona will generate strong financial returns from a base-case production scenario of ~90,000 ozpa at an AISC of A$1290/oz.”

“The inclusion of Blue Spec will enable us to leverage the Warrawoona infrastructure significantly, raising the potential for increased production and financial returns.”

“All long-lead items for Warrawoona have been ordered, with the SAG mill due to land in Port Hedland in late July.”

The Warrawoona gold project is located in the eastern Pilbara, a mere 25 kilometres south-east of Marble Bar. The project covers over 780 square kilometres of the emergent gold terrane, with the centrepiece of the company’s ground holding being the Klondyke gold discovery which is rapidly being developed and is expected to begin pushing out gold in early 2022.

Klondyke and a suite of smaller satellite deposits, host a predominantly open pit resource of 43.7 million tonnes at 1.06 grams per tonne gold, containing around 1.5 million ounces of gold.

Calidus is now building a 2.4 million tonne per annum plant a Warrawoona, with the company budgeting $120 million for construction and the move into mining.  The company coffers are currently heaving with $42 million in cash and with Macquarie Bank providing a $110 million debt facility, Calidus is fully funded to production.

Whilst the Warrawoona operation is looking down the barrel of an initial 8-year mine life, Calidus is already exploring various ways to expand its resources and charge up its cash-flow. This strategy will include ongoing exploration and development within its own tenure and the acquisition of an array of smaller, high-grade deposits through the eastern Pilbara.

First cab off the rank for the company was the acquisition of the uber high-grade Blue Spec mine from fellow Pilbara gold producer Novo Resources. The Blue Spec mine is located just 70km south-east of Warrawoona and produced more than 60,000 ounces of gold at stunning average grade of 25 g/t gold prior to its closure in 1979.

The Blue Spec mine and smaller sibling, the Gold Spec mine, boast a resource of 415,000 tonnes at 16.35 g/t gold. Calidus’ modelling indicates that the two resource areas potentially extend along strike and at depth, presenting the budding miner with an enticing target for ongoing exploration and development.

Calidus is currently completing an integration study for the blending of the Blue Spec and Klondyke ores, which will increase the average grade of ore being fed to the developing Warrawoona mill and will no doubt provide more than a few extra ounces into the gold room.

The company is now only waiting on a few outstanding approvals, including the final “works permit”, however with earthworks now ploughing ahead and much of the primary infrastructure already in place, Calidus continues its tour-de-force in the Pilbara and aims to be pouring its first gold bar in early 2022.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au