Calidus powers gold mine with renewable energy

Gold developer Calidus Resources is delivering on its environmental initiatives by executing an agreement with Zenith Pacific to install a solar farm and battery storage system to help power its flagship Warrawoona gold project in Western Australia’s Pilbara region. The solar farm is the cornerstone of the company’s carbon reduction plan at Warrawoona where Calidus is expected to churn out up to 105,000 ounces of gold annually.

The installation of the 4MW solar farm with 3.5MW battery storage system is included under a power purchase agreement – “PPA” with Zenith, with construction due to commence in the second half of this year.

The company says progress at Warrawoona is on track and on budget recently reporting construction of the processing plant is 85 per cent complete. Included in the initial construction plans is the installation of an 11MW gas-fired power station under the PPA with Zenith, with the upcoming solar farm acting as a supplementary power source.

Interestingly, management at the company said the gas-fired generators can operate using up to 25 per cent hydrogen, further reducing carbon emissions.

Power generated from the solar farm will reportedly feed into the distribution line between the power station and accommodation village.

In a 2020 study conducted by the Department of Industry, Science, Energy and Resources it was calculated the mining industry is responsible for 4 to 7 per cent of greenhouse-gas emissions globally.

As pressure mounts for the mining sector to reduce emissions, many companies are looking towards innovative technologies to meet emission targets cost effectively. Hybrid thermal and sustainable power systems, like those provided by Zenith, are proving popular amongst many miners including Red 5, Northern Resources and Silver Lake Resources.

A 2020 feasibility study on Warrawoona envisaged up to 105,000 ounces of gold production per annum over eight years from a 702,000 ounce mining inventory.

The study projected a post-tax payback period of only 15 months for a $120 million capital outlay, based on a gold price of $2,355 an ounce.

EBITDA was forecast to average $92 million a year with an impressive all-in sustaining cost of $1,290 to produce an ounce of gold across the life of mine.

The after-tax net present value clocked in at $245m, with a pleasing internal rate of return of 57 per cent also estimated in the study.

Notably, Calidus aspires to boost its production numbers in the future by incorporating gold from its nearby high grade Blue Spec project into the proposed Warrawoona operation.

At Blue Spec, the company has so far defined 219,000 ounces of contained gold grading a sensational 16.3 grams per tonne after combining its Blue Spec and Gold Spec deposits.

The company believes Warrawoona could churn out 130,000 ounces of the precious metal each year once the ore from Blue Spec is integrated into the operation.

As Calidus continues to strive towards becoming Australia’s next gold producer, it will be buoyed by strong financials and a solid gold price. A green push from its environmental initiatives may also be just what it needs to attract a new generation of investors.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au