ASX-listed gold producer in waiting, Calidus Resources says it has inked final agreements with Macquarie Bank for debt financing facilities totalling $110 million in relation to its developing Warrawoona gold project about 25km south-east of Marble Bar in WA’s East Pilbara region.
As a condition of the Warrawoona funding package, the Perth-based company locked in a mandatory hedging arrangement covering the delivery of 125,000 ounces of forward gold sales from the new mine across the 3.25-year tenor of the project loan facilities.
Calidus anticipates bringing Warrawoona on stream in early calendar 2022.
The company says the hedge book represents 19 per cent of forecast Warrawoona gold production – based on last year’s definitive feasibility study, or “DFS” – for the loan term and has been struck at an average realised price of $2,355 an ounce.
It can also elect to repay the debt early at any time during the 3.25-year period without restrictions or financial penalty.
Construction of the stand-alone mining and processing operation at Warrawoona – that has an estimated CAPEX of $120 million ascribed to it – has been advancing at a steady clip.
GR Engineering Services recently sealed the $75.5 million engineering, procurement and construction contract that will see it design and build the Warrawoona gold processing plant and associated infrastructure.
Calidus Resources Managing Director, Dave Reeves said: “We are very pleased to have executed final debt financing agreements with Macquarie. The timing of which coincides with GR Engineering mobilising to site to begin civil works at Warrawoona and the execution of the PPA (power purchase agreement) with Zenith Energy.”
“It is wonderful to see the rapid progress being made at Warrawoona with bulk earthworks (being done by Macmahon Holdings) now in full flight. The completion of the accommodation village in early April will allow mobilisation of civil construction crews to commence concrete works as Calidus continues on its transition to gold producer status.”
Calidus recently completed the purchase of the Blue Spec high-grade satellite underground gold deposit following a $12.5 million capital raise.
According to the company, Blue Spec has the potential to significantly increase Warrawoona’s production profile, mine life and free cash flows.
Calidus envisages development costs attached to Blue Spec being funded out of cash flows.
Blue Spec, approximately 75km from Warrawoona, hosts a latest stated inferred and indicated remnant mineral resource of 415,000 tonnes of ore at a cracking average grade of 16.35 grams per tonne for 219,000 ounces of contained gold.
Proved and probable open-cut and underground reserves for Warrawoona’s main Klondyke deposit currently stand at just under 14 million tonnes of ore grading an average 1.2 g/t for 521,000 ounces of contained gold.
Mr Reeves said: “While our focus remains on the successful commissioning of the stage one Warrawoona project, which is on track to pour first gold in the new year, we will also progress Blue Spec to feasibility level. This will enable us to implement the increase in production with minimal delay once we are satisfied with the performance at Warrawoona.”
A pre-DFS Blue Spec integration scoping study released by Calidus last month suggests annual gold production at Warrawoona averaging 110,000 ounces per annum for the first seven years of its initial life of mine when incorporating ore feed trucked from Blue Spec, up from 90,000 ounces per annum without it.
Warrawoona spits out pre-tax cash flows of $472 million or $59 million a year and after-tax cash flows of $662 million or $82.75 million a year for the forecast initial eight-year mine life including Blue Spec, according to the scoping study.
All-in sustaining costs of gold production remain steady at an estimated $1,292 an ounce.
With its Macquarie debt facility in place and a cash position of about $40 million as at the end of last year, Calidus has booked its ticket on the fast-moving Pilbara gold bandwagon being fuelled by Calidus at Warrawoona, Novo Resources at Beatons Creek, Capricorn Metals at Karlawinda, De Grey Mining at Mallina and Kairos Minerals at Mount York, among others.
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By Matt Birney
