Bardoc Gold is crouched and ready to take that elusive leap from gold explorer to producer after the company locked in engineering group GR Engineering as preferred tenderer for the construction of a stand-alone gold processing plant at its namesake Bardoc project 40km north of Kalgoorlie. The move follows hard on the heels of ASX-listed, Perth-based Bardoc initiating a “cash-flow optimisation” study on the multi-deposit gold project.
The study will weigh up the economics of rearranging the Bardoc mine plan to potentially increase cash flows over the first five years of operations courtesy of a higher production rate when compared to the rate contemplated in the definitive feasibility study or “DFS”.
According to the company’s DFS tabled in late March this year, the forecast annual gold production at Bardoc currently stands at about 130,000 ounces per annum across an initial processing life of mine of 8.2 years, with all-in sustaining costs of production coming in at a healthy average of $1,188 an ounce.
The DFS envisages the Bardoc mining and processing operation spitting out average impressive free cash flows before tax of $113 million a year post-construction, assuming a realised gold price of $2,250 an ounce.
Pre-production CAPEX for the proposed development currently stands at about $177 million and the capital payback period at 32 months from production start-up.
Facilitating Bardoc’s plan to front-end production and cash flows is the inclusion of a flotation circuit in the main plant construction stage right from the outset rather than at a later date.
The flotation circuit will enable Bardoc to tap the “highest value” keystone Aphrodite deposit earlier in the mine schedule.
In tandem with the flotation circuit move, Bardoc is also contemplating building the proposed 2.1-million-tonne-per-annum gold processing facility at the Aphrodite site.
Aphrodite lies about 35km north of the project’s other key deposits, Zoroastrian and Excelsior, where the company was originally looking at establishing the Bardoc gold processing plant.
Management says the company and GR Engineering, who has signed a letter of intent with Bardoc in relation to a proposed engineering, procurement and construction contract for the processing facility and associated infrastructure, will run the ruler over both options as part of the optimisation study.
Bardoc Gold Chief Executive Officer Robert Ryan said: “Bardoc is moving rapidly towards the development of a new high-quality, high-margin gold project near Kalgoorlie. The appointment of GR Engineering marks another key step in the development of the project and establishes an important relationship with a leading design and construction group.”
The latest stated indicated and inferred mineral resource for the multi-lode Aphrodite deposit tips the scales at 25.5 million tonnes at an average grade of 2 grams per tonne gold for 1.66 million ounces of contained gold.
Included in the Aphrodite resource figures are probable open-pittable ore reserves of 3.96 million tonnes grading an average 1.8 g/t for 229,000 ounces of contained gold and underground ore reserves of 3.13 million tonnes at 3.4 g/t for 344,000 ounces of contained gold.
Bardoc has also launched into a significant drilling campaign at the Zoroastrian deposit in its quest to grow that multi-lode system’s 530,000-ounce gold resource and the project’s global resource base of about three million ounces.
Mr Ryan said: “We are ramping up on every front with drilling under way to grow the inventory and mine life, a study on increasing production and cash flow significantly and now the award of preferred tenderer status to GR for construction of the plant.”
The $116 million market-capped company hopes to nail down project financing and make a final investment decision on the Bardoc project development before the end of this year.
It is targeting a start to construction and open-pit mining in the March 2022 quarter and aiming to bring Bardoc on stream and pour first gold around the December quarter next year.
With advancing assets boasting a tier one mineral address within WA’s coveted Eastern Goldfields, Bardoc looks set to make the transition from explorer to producer – and in the process, join a more exclusive club that is churning out more than 100,000 ounces a year of the precious yellow metal.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
