Calidus Resources has commenced early works at the Warrawoona gold project in Western Australia following the release of its feasibility study (FS).
According to the FS, the Warrawoona gold project has the capacity to produce 658,000 ounces of gold over an eight-year mine life.
Calidus plans to commence the main project construction in the March quarter next year once all permits have been secured.
The FS also noted a 30 per cent increase in the underground ore reserve to 120,000 ounces and total project reserves increasing to 547,000 ounces of gold.
Calidus estimated that production at Warrawoona would average at 90,000 ounces per year in the first seven years of its mine life, peaking at 105,000 ounces in the fifth year at an average all in sustaining cost of $1290 per ounce of gold.
“The feasibility study confirms the significant technical and economic strengths of Warrawoona,” Calidus managing director Dave Reeves said.
“The project is set to generate substantial cashflow based on low costs and robust margins and underpinned by extensive reserves in a tier 1 location.
“The strong results of this study pave the way for us to complete debt funding in the coming quarter and start main construction early next year.”
The construction phase at Warrawoona is expected to take 12 months, which will be followed by a five year open pit mining plan before commencing underground production in the third year.
Calidus has already identified its preferred contractors for all major phases of the development, including Macmahon for the open pit mining and tailings dam, GRES for the process plant, Rangecon for the mining village and Telstra for communications.
The company is making its move to capitalise on further promising gold opportunities in the Pilbara region, having finalised its plans to acquire the nearby Blue Spec mine.
According to Calidus, Blue Spec has a strong potential to increase Warrawoona’s total production and cashflow further, leveraging on the Warrawoona infrastructure.
Final approval from the Environment Protection Authority (EPA) for the Warrawoona project is expected by the end of this year.