Barton Gold boosts confidence with promising Tunkillia scoping study outcomes

Barton Gold’s (ASX: BGD) (OTCQB: BGDFF) confidence in the multiple optimisation opportunities available at its Tunkillia gold project in South Australia has been bolstered by an initial scoping study that potentially ranks it among Australia’s leading gold mines.

Managing Director Alex Scanlon said that the study results have validated Barton’s strategy to target economies of scale, with an average production of 130,000 ounces per annum of gold and 311,000ozpa silver yielding an average operating cash margin of $1,626/oz at today’s gold prices.

The project also benefits significantly from a higher-grade ‘starter’ pit, which generates around 181,000oz of gold and an operating cash flow of $2,265/oz during the first 18 months of processing.

Conservative assumptions

“We have outlined a project that, were it in operation today, would rank favourably among Australian gold producers,” Mr Scanlon said.

“Even based on initial processing cost assumptions that Barton considers to be fairly conservative and with only a six-year initial mine life, Tunkillia delivers strong returns (40% internal rate of return), a 1.9-year payback period and a competitive life-of-mine all-in sustaining cost (AISC) of $1,917/oz – which would rank it #17 among 47 Australian producers reporting AISC today.”

“Not a bad start at all, and we’re just getting started unlocking the value in Tunkillia and its neighbouring assets.”

Dual strategy

The results from the study are a great reward for Barton and its dual-focused gold development strategy, which includes progressing the historic Tarcoola gold project in SA.

Barton only acquired Tunkillia in December 2019 with the view that the project had significant growth potential due to limited historical exploration during periods of lower gold prices and its decision to pour funding into exploration has paid off with multiple resource upgrades.

“In only three years’ time, we have grown Tunkillia to a 1.5Moz gold JORC resource and demonstrated a viable, large-scale standalone operation,” Mr Scanlon said.

“We believe this is just the start for Tunkillia and its neighbouring assets and with over $10 million in cash we are very well-positioned to continue systematically building up their combined potential.”

Tunkillia options

Barton is now preparing to use what it has learned from this initial scoping study to further refine its Tunkillia development options.

“This is only a preliminary study and we have already identified multiple areas for potential optimisation in terms of process design, capital costs, operating costs and growth in the life of the mine and materials schedule,” Mr Scanlon said.

“Now that we have a better understanding of the relationship between CapEx, OpEx and mine design in this asset, we’ll be moving straight into optimisation work with a view to delivering a substantially improved optimised scoping study later in FY25.”