The Warrawoona Gold Project located in the Pilbara Goldfield of Western Australia, is one of the highest margin and significant undeveloped gold projects in Australia.
The Warrawoona Gold Project:
- Global resource of 43.7Mt @ 1.06g/t Au for 1.5 million ounces
- 71% of the Mineral resource is classified as Measured and Indicated categories
- Proven & Probable Ore Reserve of 13.6Mt @ 1.2g/t for 519,000 ounces
- Positive Feasibility Study completed in September 2020 outlining a high-margin gold operation with average gold production of 90,000oz/pa at $1,290/oz AISC over an initial 8-year mine life via a 2mtpa conventional CIL processing circuit with single stage crush and SAG mill
- Project Economics (Based on A$2,500/oz gold price):
- Pre‐Tax Project Cashflow of $629M, average EBITDA of $110M pa, NPV8% $408M, IRR 81% and payback of 13 months
- Post‐Tax Project Cashflow of $447M, NPV8% $286M, IRR 69% and payback of 13 months
- Pre‐production capital cost of $120M including contingency and pre‐production mining costs
- Underground Reserve increases 30% to 120,000oz with further growth potential from planned resource extensional and infill drilling
- Excellent potential for Resource growth through infill and extensional drilling;
- Mineralisation outcrops at surface at all deposits and is open along strike and down dip at all deposits
- 780km2 of highly prospective tenure covering the entire greenstone belt and containing over 200 historic workings provides large exploration upside
Location and Tenements
The Warrawoona Gold Project is situated in the East Pilbara district of the Pilbara Goldfield of Western Australia, approximately 150km south east of Port Hedland and approximately 25km south east of the town of Marble Bar.
Historically fragmented ownership has held back development of the area. Calidus now controls the entire Warrawoona Greenstone Belt with a total of 780km2 under its control. Since listing in mid-2017 with a resource of 411kozs, the Company has undertaken a systematic modern approach to exploration and tripled the resource base to its current 1.5 million ounces.
Klondyke Prospect
The mining leases comprising the Klondyke Prospect lie within the Warrawoona Gold Project, one of the oldest greenstone belts within the Pilbara Craton.
Independent consultants Optiro and Widenbar & Associates completed a resource update in June 2020 to derive a 2012 JORC compliant total Resource of 43.7Mt @ 1.06g/t Au for 1.5 million ounces and includes 1.1 million ounces in the Measured and Indicated Category (announced by the Company on 29 June 2020).
The resource is currently defined over 5km of strike and is open along strike and down dip. Following the release of the Company’s Feasibility Study, ongoing drilling will target both the along–strike extensions and down–dip potential of this large mineralised system that outcrops at surface.
The main Klondyke shear hosts extensive old workings and has been traced for over 12.5km in length highlighting the large upside of this structure.
Feasibility Study
Calidus completed a Feasibility Study (FS) in early September 2020 confirming the Warrawoona Gold Project will be a robust operation with strong financial returns.
The Feasibility Study includes a 30% increase in the underground Reserves to 120,000oz (from June 2020), with total Project Reserves increasing to 547,000oz. This underpins forecast production averaging 90,000 ounces a year in the first seven years, peaking at 105,000oz in year five, at an average AISC of A$1,290/oz.
The compelling technical and economic outcomes of the FS have led the Board to immediately approve the commencement of early works. The early works include the site access road, installation of the 240-room accommodation village, establishment of the communications network and installation of water bores that will be utilised for construction, dewatering and production.
The early works programme is designed to provide the backbone of infrastructure ahead of the Final Investment Decision and the completion of permitting to facilitate main project construction.
Orders have been placed for long lead items, including the SAG mill, in preparation for the commencement of the main Project construction in the March Quarter of next year.
The key production metrics and financial outputs of the FS are outlined in the table below:
| Production Summary Units Feasibility Study | ||||
| Initial Mine Life | Years | 8.3 | ||
| Total Ore Mined | oz | 17.6Mt @ 1.24g/t for 702koz | ||
| Gold Recovered | oz | 658,277 | ||
| Processing Rate | Mtpa | Oxide/Transition 2.4Mtpa and Fresh 2.0Mtpa | ||
| Average LOM CIL Metallurgical Recovery | % | 94.4% | ||
| Project Development Capital | ||||
| Processing Plant | A$M | 78 | ||
| Non‐Processing Infrastructure and Owners
Cost |
A$M | 23 | ||
| Contingency | A$M | 4 | ||
| Project Development Capital | A$M | 105 | ||
| Pre‐Production Mining Costs | A$M | 15 | ||
| Total Pre‐Production Capital | A$M | 120 | ||
| Project Economics | ||||
| Gold Price | A$/oz | 2,200 | 2,500 | 2,800 |
| Gold Revenue | A$M | 1,448 | 1,646 | 1,843 |
| All‐In Sustaining Cost (AISC)1 | A$/oz | 1,281 | 1,290 | 1,299 |
| Project Cashflow (Pre‐tax) | A$M | 437 | 629 | 820 |
| NPV8% (Pre‐tax) | A$M | 272 | 408 | 543 |
| IRR (Pre‐tax) | % p.a. | 58% | 81% | 103% |
| Project Cashflow (Post‐tax) | A$M | 309 | 447 | 587 |
| NPV8% (Post‐tax) | A$M | 187 | 286 | 386 |
| IRR (Post tax) | % p.a. | 48% | 69% | 91% |
| Payback Period2 | Years | 1.5 | 1.1 | 0.9 |
Production Costs
| Costs of Production LOM Unit Cost LOM Unit Cost (A$/t) (A$/oz) | ||
| Open Pit Mining | $18 /t OP Ore | $386 /oz |
| Underground Mining | $53 /t UG Ore | $279 /oz |
| Total Mining | $25 /t | $666 /oz |
| Processing and Maintenance | $16 /t | $422 /oz |
| Business Services | $2 /t | $56 /oz |
| Total Cash Cost (C1) | $43 /t | $1,143 /oz |
| Royalties | $3 /t | $74 /oz |
| Sustaining Capital | $3 /t | $73 /oz |
| Total All‐In Sustaining Cost (AISC) | $48 /t | $1,290 /oz |
Exploration Upside
The Company controls the entire Warrawoona greenstone belt and has over 200 historic workings on these tenements.
The Warrawoona syncline is one of the largest greenstone-hosted goldfields in the East Pilbara, Western Australia. The currently explored gold deposits are composed of quartz lodes within three main regional shear zones: the Klondyke shear zone, the Copenhagen shear zone and the Fielding’s Find shear zone. The sub-vertical shear zones present impressive networks of quartz/calcite/sulphide/ankerite veins and are locally lined with heavily brecciated fuchsite sericite-pyrite bearing mafic rocks. Visible gold is often observed in quartz veins throughout the mineralised package.
In early 2018 it was recognised that historic geochemistry coverage on prospective regional shear corridors to the north, south and west of the main Klondyke-Coronation-Fielding’s Gully trends was very limited. A total of 6,363 soil geochemistry samples were collected during 2018. The results were promising and outlined a large number of +100ppb Au in soil anomalies across the tenement package including:
- Klondyke Tend – 11km long, up to 350m wide
- Liberator – 3km long, up to 500m wide
- Ada North – 450m long, up to 100m wide
- Ada South – 4.5km long, up to 150m wide
- Salgash – 550m long, up to 200m wide
- Pryces West – 2km long, up to 350m wide
Recent aeromagnetic and radiometric surveys have also identified 95 targets, 22 of which Calidus considers to be high priority. A large portion of these targets lie on an undrilled shear to the west of Klondyke.
Satellite Deposits
Three satellite deposits, Copenhagen, Coronation and Fieldings Gully have been drilled i provide an additional 113,000 ounces of resource to the project.
Copenhagen – High grade near surface resource
Historical mine located 10km from the Klondyke Prospect hosting a 2012 JORC Code compliant Indicated & Inferred Resource of 0.3Mt @ 4.54 g/t Au for 43,000 ounces. The prospect remains open along strike and down dip.
Coronation
The Coronation deposit lies within mining lease M45/672, approximately 15km SE of Marble Bar. It forms part of the Warrawoona Gold Project and was initially discovered during the Pilbara gold rushes of the late 19th century when limited small-scale mining was undertaken. Mineralisation at Coronation is hosted in quartz pyrite stringers within hydrothermally altered quartz–sericite schist, and chert and BIF horizons.
Modern exploration commenced in the in the early 1980s, with a joint venture between Seltrust Mining Corporation, A1 Consolidated and Monarch Petroleum. The JV undertook surface mapping, rock-chip sampling and a number of shallow percussion holes confirming the presence of gold mineralisation with a strike length over 1,000m to a depth of 20m.
Calidus Resources’ maiden Mineral Resource estimate was completed in November 2018, with 478kt @ 2.19g/t for 33.6Koz of Inferred Mineral Resource.
In October 2020, twenty-nine RC holes, designed at a nominal spacing of 20m x 20m (along strike and down dip) were drilled to test the potential to extend the current Mineral Resource along strike to the southeast. All intercepts from all the holes are contained in Table 2. Ore-grade gold mineralisation is present from surface over a strike length now of approximately 800m to a depth of 150m from surface. It remains open at depth and along strike to the southeast where sparse drilling and surface mapping suggest the mineralised structure continues.
Significant results from recent and historic drilling at Coronation includes:
9m @ 5.21 g/t from 9m
8m @ 7.64 g/t from 64m
3m @ 16.67 g/t from 16m
12m @ 7.98 g/t from surface
14m @ 3.77 g/t Au from 52m
6m @ 2.15 g/t from 30m
3m @ 4.00 g/t Au from 54m
These new results will form the basis of an updated Mineral Resource estimate which should upgrade confidence in the current Mineral Resource from Inferred to Indicated.
Fieldings Gully
The Fieldings Gully historical mine is located 15km from the centre of the Klondyke area hosts a 2012 JORC Code compliant Resource of 0.6Mt @ 1.84 g/t for 36,000 ounces. The prospect remains open along strike and down dip.
