Gold explorer Brightstar Resources is budgeting $22 million to deliver its proposed “low-capital pathway” to restart its Menzies and Laverton projects in the Goldfields.
Gold explorer Brightstar Resources is budgeting $22 million to deliver its proposed “low-capital pathway” to restart its Menzies and Laverton projects in the Goldfields.
The Goldfields-focused hopeful has etched a plan for restarting mining operations at the two assets, namely the Menzies project which was acquired from Kingwest Resources through a merger deal finalised in May.
The Menzies gold project 130 kilometers north of Kalgoorlie has historically and intermediately produced a total of 787,200 ounces before it was closed about 20 years ago.
Brightstar’s Laverton operation encompasses three development projects nearby to its flagship processing plant, on care and maintenance.
The Perth-based company released the results of its scoping study to the market this morning, revealing it would target production of 322,617 ounces over an initial eight-year life of mine.
The junior miner has placed a $22 million pre-production capital expenditure price tag on the endeavour.
Brightstar said it was assessing potential debt and equity funding options and had received interest from financial institutions to finance the project.
The study estimated first production from the Menzies project would be achieved within six months of mining commencement, while the Laverton asset would secure first gold within nine months from the beginning of processing plan upgrades.
Brightstar estimated the two projects have a net present value of about $103 million and internal rate of return of about 79 per cent based on a gold price of $2,900 per ounce.
The ASX-listed company said it would initially use third party processing facilities in the Kalgoorlie-Leonora region within trucking distance to eliminate new build construction and commissioning risks.
“We have delineated four key deposits within our Menzies and Laverton gold projects which will deliver an executable eight-year life of mine plan which will result in Brightstar becoming a meaningful gold producer in the WA goldfields,” managing director Alex Rovira said.
“The staged mined development has been optimized to minimize up-front capital costs, utilising operational cash flow to organically fund the refurbishment of the Laverton processing facility to minimise equity dilution and limit onerous debt and hedging exposure associated with large capex builds magnifying commissioning risks.
“The mine plan has been designed to minimize risks associated with ramp up and deliver a profitable gold producer in WA with significant upside to expand on the production profile and mine life.”
The junior miner engaged ER Engineering Services and ABGM to deliver to study.
Brightstar said it had commenced work on a preliminary feasibility study alongside infill drilling at both Menzies and Laverton projects.
