Perth-based Bardoc Gold (ASX: BDC) has appointed local company GR Engineering Services (ASX: GNG) to manage the engineering, procurement and construction (EPC) of a processing facility at its namesake Bardoc project near Kalgoorlie in Western Australia.
The move comes just a week after Bardoc initiated a cashflow optimisation study aimed at increasing the forecast production rate, margins and cashflow at the 3.07-million-ounce project.
It represents a significant step for the company as it continues towards streamlining the mining and production schedule and improving project economics and returns.
Preliminary analysis shows there is strong potential to increase total production over the first five years of mining at Bardoc, based on a definitive feasibility study forecast of 130,000 ounces per annum at an all-in sustaining cost of $1,188 per ounce.
Under the terms of the EPC agreement, GR Engineering will work closely with Bardoc on optimisation work for the relocation of the processing facility to the 1.6Moz Aphrodite deposit and the inclusion of a flotation circuit.
The facility was initially proposed to be located next to the cornerstone Zoroastrian and Excelsior deposits, however, the relocation will provide the opportunity to extract further value from Aphrodite and the highly-prospective Omega, Sigma and Gamma lodes.
The optimisation work will be completed ahead of project financing and a final investment decision before year end.
High margin project
Bardoc chief executive officer Robert Ryan said GR Engineering will help the company move rapidly towards the development of the high quality, high margin project.
“The competitive tender process attracted a number of submissions, reflecting the rapid progression of the Bardoc project and the high-quality work completed as part of the definitive feasibility study,” he said.
“The appointment of GR Engineering marks another key step in the development of this project and establishes an important relationship with a leading design and construction group.”
He said the progression from the current letter of intent to a formal EPC contract will be subject to various conditions including board approvals, project financing, statutory approvals and final contractual pricing and terms.
As part of the accelerated growth strategy at the Bardoc project, Bardoc Gold has embarked on a major drilling program with a view to increasing the current 530,000oz resource at the Zoroastrian deposit.
The company has an updated exploration target of between 2.05 million tonnes and 2.59Mt grading up to 4.18 grams per tonne for between 225,000-336,000oz gold.
“Zoroastrian is without a doubt one of the best assets in our portfolio, with drilling consistently exceeding expectations,” Mr Ryan said.
“We are ramping up on every front to grow the inventory and mine life,” he added.