Bardoc Gold (ASX: BDC) has kicked-off an optimisation study that aims to enhance the already strong definitive feasibility study and bring in increased early cash flow for its flagship 3 million ounce namesake gold project near Kalgoorlie in Western Australia.
The current DFS estimates pre-production capital of $177 million is required with a 32-month pay back period.
Average gold sales are predicted of 135,760 ounces per annum over an 8.2-year mine life.
The life-of-mine all-in sustaining costs are expected to total $1,188/oz.
Based on an Australian dollar gold price of $2,250/oz, the study assumes life-of-mine pre-tax cash flow of $740 million.
The new optimisation study follows a revised mine plan and ongoing refinements to the DFS along with engagement with engineering, procurement and construction contractors and recent exploration successes at the project.
Potential to boost production and cash flow
After preliminary analysis, Bardoc believes there is “strong potential” to increase the gold production at the project in the first five years.
This is proposed to be done by bringing forward mining from the Aphrodite deposit and re-locating the proposed 2.1Mtpa processing plant to this location instead of the initially proposed site next to the Zoroastrian and Excelsior deposits.
“This provides the opportunity to extract further value from the 1.6Moz Aphrodite deposit and, in the future, from the highly prospective Omega, Sigma and Gamma lodes, where recent exploration success has highlighted the strong potential for significant resource growth,” Bardoc noted.
Following this path would add to the up-front capital requirements due to the need to construct the flotation circuit required to treat Aphrodite ore.
However, Bardoc says this will be partially offset by other infrastructure cost reductions. Additionally, high-grade ounces from the deposit are anticipated to generate strong free cash flow in the first five years of the mine plan.
“The revised mine plan allows us to bring forward ounce production and allow for sustained production from both underground mines concurrently,” Bardoc chief executive officer Robert Ryan explained.
“This enhances project economics, which will allow the company to repay debt earlier and expedite returns to shareholders.”
“We’re looking forward to providing further updates on the project in the coming weeks as we close-in on project financing and a final investment decision before the end of the year,” Mr Ryan added.