Calidus Resources has signed an agreement to buy a high-grade gold project for $19.5 million, which will use infrastructure from the company’s proposed Warrawoona mine.
Calidus Resources has signed an agreement to buy a high-grade gold project for $19.5 million, which will use infrastructure from the company’s proposed Warrawoona mine.
The deal involves Novo Resources Corporation’s past-producing Blue Spec gold and antimony project in Western Australia’s Pilbara region – about 70 kilometres from the Warrawoona site.
Blue Spec is known for hosting coarse gold mineralisation, Calidus says, and will use the company's proposed 100,000 tonnes per annum sulphide plant, which will be located at the Warrawoona site next to the main 2 million tonnes per annum CIL plant.
Calidus said both the Warrawoona and Blue Spec projects had cost synergies, while the deal would also further the company’s exploration potential.
Managing director David Reeves said the Blue Spec purchase would enable Calidus to raise its production.
“By leveraging our planned sulphide plant and underground mining base at Warrawoona, we intend to undertake study work aiming to significantly reduce costs associated with mining and processing this very high grade deposit, which has the potential to add significant production ounces to Calidus in future years,” he said.
Work including mining, metallurgical and environmental studies has already been completed at Blue Spec, Mr Reeves said.
“[That] will allow a rapid progression of the deposit into our Warrawoona mine plan,” he said.
“With early construction works now underway at Warrawoona and main project construction commencement on track for early next year, we will advance Blue Spec as rapidly as possible.”
Mr Reeves said Novo’s Blue Spec asset was one of the highest grade gold deposits in Australia.
Its mineral resource includes 415,000 tonnes at 16.3 grams per tonne of gold, which Calidus is currently reviewing.
The site is accessible by existing roads, with a condition of the sale being a licence agreement that will permit Calidus access to Novo-owned roads.
Blue Spec has historically produced an average 25g/t of gold with more than 60,000oz of gold and 1,500t of antimony.
It is owned by Novo’s Beatons Creek Gold subsidiary, which will receive a cash payment of $19.5 million, which includes a $200,000 deposit from Calidus.
The deal, subject to a number of conditions including Calidus arranging sufficient financing, is expected to complete by November 30.
Calidus shares were up 6 per cent at 11:46am to trade at 62 cents.
