Calidus Sets Initial Warrawoona Gold Output at 580,490 Ounces

Calidus Resources (ASX:CAI,OTC Pink:CALRF) released the results of a prefeasibility study (PFS) for its Warrawoona gold project, estimating that approximately 580,490 ounces of the yellow metal will be recovered over an initial six year mine life.

On Wednesday (July 17), the miner said that the project, which is located in the Pilbara region of Western Australia, will require AU$95 million in capital to advance.

“The maiden reserve and PFS show that Warrawoona will be a robust Australian gold project based on a simple operation with strong margins and cashflow. It also has substantial potential for growth in the mine plan material and mine life, as demonstrated by recent exploration results,” said Dave Reeves, managing director of Calidus.

The pre-tax net present value for Warrawoona is estimated at AU$151 million with an internal rate of return of 40 percent, based on a gold price of AU$1,800 per ounce. The payback period for the asset is set at just over two years at an all-in sustaining cost of AU$1,159 per ounce.

Life-of-mine revenues for Warrawoona are expected to be over AU$1 billion. During that time, C1 costs are estimated to reach AU$607 million, or around AU$51 per tonne.

“We will undertake systematic drilling in the next quarter to further improve our knowledge of the ore body as another step in the de-risking process,” said Reeves. The company will focus on both down-dip and shallow drilling along strike to the east at Warrawoona to allow for increased conversion from resources to reserves.

Reeves also noted that project permitting should take about 12 months. During this time, the miner will continue to finalize a feasibility study, put financing into place and conduct exploration geared at extending Warrawoona’s life.

The Warrawoona gold project has a total resource of 21.3 million tonnes at 1.83 grams per tonne gold for 1.25 million ounces, which includes a higher-grade component of 14.6 million tonnes at 2.37 grams per tonne gold for 1.1 million ounces.

As of 4:23 p.m. EDT on Wednesday, Calidus was trading at AU$0.03.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.