Phoenix Gold plans staged project

Kalgoorlie-based Phoenix Gold has opted for a low-cost development option at its Castle Hill project, with plans to begin production using third-party milling capacity rather than build a stand-alone project.

The company envisages that mining will commence in the second half of this year, with 600,000 to 800,000 tonnes of ore delivered for haulage and treatment.

Base case gold production is estimated at 40,000 to 50,000 ounces in the 2014-15 financial year.

The project is located some 50 kilometres from Kalgoorlie, allowing the company to utilise spare milling capacity.

Phoenix said the staged approach allowed for potential joint venture arrangements to be explored with Norton Gold Fields under existing agreements between the companies.

Norton has options over the mining and milling of gold ore from two deposits within the Castle Hill project.

Today’s announcement follows completion of a definitive feasibility study into a stand-alone mining and processing operation.

The study concluded that Phoenix would need to invest $136 million in the project, with average annual gold production of 129,550oz.

It also concluded that certain deposits could be economically mined with a gold price of $US1,310/oz.

The staged development involves up-front capital spending of between $8 million and $10 million.