Catalyst is set to acquire the Old Highway gold project in Western Australia from Sandfire Resources for $32.5 million.
Old Highway is located 40km south-west of Catalyst’s Plutonic processing plant and has a resource of 206,000 ounces (oz) at 3 grams per tonne (g/t) gold which includes a higher-grade underground component of 140,000oz at 4.6g/t gold.
Initial estimates by Catalyst put the near-term gold development at a net present value of $280 million with an all-in sustaining cost of $1588 per ounce at a gold price of $5000 per ounce.
The total consideration includes a $2.5 million cash deposit and a $30 million cash payment upon completion of the deal.
The acquisition marks Catalyst’s first expansion in WA beyond the Plutonic Belt.
As part of the binding agreement, Catalyst and Sandfire will also collaborate on the transfer of responsibility for the DeGrussa aerodrome to Catalyst.
Catalyst said the project is a low-capital-intensity, low-operating-risk satellite deposit located close to Plutonic, allowing for significantly reduced development costs.
Catalyst managing director and chief executive officer James Champion de Crespigny said there is an interesting exploration upside at Old Highway, with potential to extend mine life and unlock nearby prospects.
“Catalyst has been investing a lot of money into exploration along the Plutonic Belt to expand the known deposits,” he said. “It has also been starting up several undeveloped satellite gold projects lying on the belt.”
These include Maficanti with 12m at 16.7g/t gold, Cow Hole Bore with 22m at 5.3g/t gold and Shed Well East with 15m at 5.4g/t gold.
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