Calidus sets mill in motion at Warrawoona

Calidus Resources has ticked off another major milestone in its quest to become Australia’s next gold producer with the commencement of continuous ore processing at its Warrawoona gold project in WA’s emerging Pilbara goldfields.

The company says processing of low-grade ore is underway and will transition to run-of-mine ore over the coming week as operations move to a steady-state.

As gold builds up in the processing circuit, Calidus reported the first gold pour is expected within the next two weeks.

The latest milestone has followed on seamlessly from the company’s recent report that a fleet of eight 100-tonne trucks is onsite and operational, along with the project’s main excavators that have already amassed 140,000 tonnes of ore on the ROM pad, targeting 200,000 tonnes once operational.

The company’s projections for Warrawoona include “stage one” gold production averaging 90,000 ounces per annum over an initial mine life of eight years and all-in sustaining costs averaging $1,290 an ounce across the life of mine.

According to Calidus, pre‐production capital costs chimed in at $120 million including contingency and pre‐production mining costs with Calidus forecasting an after-tax cash flow of $447 million, an internal rate of return of 69 per cent and payback after just 13 months.

Warrawoona’s main Klondyke deposit hosts proved and probable open-pit and underground reserves of 14 million tonnes of ore grading an average 1.2 grams per tonne for 521,000 ounces of contained gold.

Under the multi-stage development plan, production is scheduled to ramp up courtesy of additional feed from the nearby Blue Spec project, located some 75 kilometres from Warrawoona.

Blue Spec already boasts an inferred and indicated mineral resource calculated by previous owners that weighs in at 415,000 tonnes averaging a blockbuster grade of 16.35 g/t for 219,000 ounces of contained gold. Results from recent drilling will feed into a definitive feasibility study resource update expected in the coming months.

Calidus sees Blue Spec’s ore contribution propelling production at the Warrawoona project to nearly 130,000 ounces per annum for three years – from year four to six - across the initial eight-year mine life.

Remarkably, in spite of the Covid pandemic which threw the resources sector into disarray in 2020 and significant supply chain and labour force disruptions this year, the company reported work at Warrawoona proceeded on time and on budget.

Calidus Resources Managing Director, David Reeves said: “The start of continuous processing operations less than five years since our debut on the ASX is a major achievement in the life of Calidus and is the result of an outstanding performance by all our team and contractors.”

“We look forward to becoming West Australia’s next gold producer.”

Whilst overall commodity prices continue to trade erratically on the back of rising inflation reports in the US, pandemic-related shutdowns in China and increasing global tensions surrounding the Russian invasion of the Ukraine gold remains the go-to-market in times of crisis. The gold price has rallied over 4 per cent since the beginning of 2022, closing just shy of $2,650 an ounce last week only marginally below all-time highs.

Calidus is now set to take advantage of the current ‘perfect storm’ conditions being enjoyed by gold producers. With the crucibles heating up at Warrawoona in preparation for its first gold pour in the coming weeks and having navigated a deluge of challenges to deliver the project on time and on budget, Calidus has pulled off a masterclass in mining development.

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