Barton Gold launches water monitoring program at Tunkillia ahead of mining lease application

Barton Gold (ASX: BGD) (OTCQB: BGDFF) has commenced a baseline water monitoring program at its large-scale Tunkillia gold project in South Australia.

The program is a key long-lead feasibility and approvals item that compile the minimum of two years’ worth of baseline data Barton needs prior to the start of mining and production.

Managing director Alexander Scanlon said the company would continue to focus on long-lead items with a view to submitting a mining lease application before the end of next year.

Tunkillia scoping study

Data collected from Barton’s water monitoring program will allow Barton to compare new baseline information with historical figures collated during past analyses at Tunkillia.

The program follows the release in May of the Tunkillia optimised scoping study, which demonstrated the project could provide $2.7 billion in operating free cash flow, $1.4b net present value and a 73% internal rate of return.

Importantly, it showed that material efficiencies and record commodity prices could drive an estimated total payback for the development within 13 months of start-up.

Extended mine life

Those material efficiencies have extended the project’s total life (including construction) to 10 years (up from eight in the initial scoping study) and accelerated higher-value mill feed over an eight-year life-of-mine.

Barton expects Tunkillia to process 30.7 million tonnes of material to produce 833,000 ounces of gold and 1.9Moz of silver.

A planned ‘starter’ pit will produce approximately 206,000oz gold for $825 million in operating free cash over the first 13 months.

Stage 1 studies

Barton is completing studies for Stage 1 operations to leverage the historic Central Gawler Mill facility in its anticipated move towards ‘producer’ status in the new year.

This will enable the company to generate free cash flows to advance and develop Tunkillia as a Stage 2 expansion project.

The staged approach offers shareholders a lower-cost, lower-risk and lower-dilution pathway to an annual gold production target of 150,000oz.

Along with the Tarcoola project, Tunkillia forms part of Barton’s two-pronged development focus as it leads the re-emergence of South Australia’s gold sector.