Warrawoona construction on track as Calidus taps first debt

ASX-listed WA gold developer, Calidus Resources says plant construction at its Warrawoona mining and processing operation about 25km south-east of Marble Bar in the East Pilbara region is well advanced as it draws down the first tranche of funds from a Macquarie Bank $110 million debt facility.

The Perth-based company has been ticking off a succession of development milestones over the past few months, which is no mean feat in the current tight labour market, and has just received $25 million of the $110 million debt to keep the Warrawoona construction schedule on track.

The debt facility together with its cash reserves will take Calidus through to the start of gold production at Warrawoona, which has a budgeted pre-production capital cost of $120 million.

Management says the new open-cut and underground mine remains on budget and on course to pour first gold in the June quarter next year.

Mining and mill commissioning are slated to kick off in the preceding quarter.

Calidus Resources Managing Director, Dave Reeves said: “This is another significant milestone for the company and the development of Warrawoona. Our strategy is proceeding to plan, and we are now less than a year away from joining the list of ASX gold producers.”

Projections for Warrawoona in the company’s most recent investor presentation 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.

EBITDA has been forecast to average $92 million a year based on a gold price of $2,355 an ounce and post-tax capital payback has been put at an impressive 15 months.

Calidus also has 125,000 ounces of production hedged at $2,355 an ounce as part of its Macquarie debt agreement.

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.

An initial total mining inventory has been calculated at about 702,000 ounces of gold, with a low anticipated open-pit strip ratio of 3.4:1.

Ore throughput is expected to run at 2.0-2.5 million tonnes per annum through the conventional CIL processing plant and life-of-mine recovery rates are tipped to average 95 per cent.

The reserves are contained within a measured, indicated and inferred resource estimate for Klondyke of 42.3 million tonnes at an average grade of 1.02 g/t for 1.38 million ounces of contained gold.

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