Emerging gold developer, Calidus Resources, is roaring towards first gold production at its Warrawoona project in WA’s Pilbara, calling for major contract tenders for the planned $116m mine development and appointing an exclusive debt adviser.
With the gold price piercing the US$1,800 per ounce mark and threatening to test the A$2,600/oz level, Calidus is moving quickly to get its ducks in a row in order to meet an accelerated development schedule at Warrawoona.
Calidus says it is on track to finish a definitive feasibility study into the project this quarter and it is targeting first gold production about 10 months after the start of construction in the first quarter of next year.
In a sign that the project has shifted gear, the company has now put its open pit mining contract, processing plant, tailings dam and power station construction contracts out to tender.
Eddie Rigg’s Argonaut has been locked in to act as exclusive debt adviser and according to Calidus, the company has already received interest from potential finance providers.
A key pillar of the feasibility study is advancing all major contracts to preferred tenderer stage. This will give us current market rates for our feasibility study cost estimates, as well as identify the strategic partners we will work with to build and operate the Warrawoona gold mine.
The appointment of Argonaut will allow Calidus to advance project finance discussions in parallel with the finalisation of the feasibility study, keeping us on track to start construction early next year.
The company released an updated pre-feasibility study late last month that incorporated revised reserves of 13.6 million tonnes grading 1.2 grams per tonne gold for a contained 519,000 ounces and a stunning project capex payback period of only 13 months at an extraordinary internal rate of return of 77%.
Mr Reeves said Calidus was aiming for at least 70% debt funding of the forecast $116 million capital cost.
Based on the gold price of A$2,500/oz used in the PFS, the company now estimates Warrawoona will post robust after-tax cashflows of $468 million, before-tax cashflows of $648 million and revenues of $1.55 billion over an initial 8-year mine life. Average output of 85,000 ounces per annum has been forecast for the first six years of operations at an average all-in sustaining cost of just A$1,251/oz.
Calidus’ market cap is now nudging $120 million and the updated PFS has calculated an after-tax net present value on the project of $303 million.
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