Calidus Resources shines with record gold production at Warrawoona

Gold producer Calidus Resources (ASX: CAI) has just reported its best quarter of production from the Warrawoona mine in Western Australia’s Pilbara region.

Shares in the company jumped by as much as 16.6% on the news.

Calidus today reported March quarter production of 15,118 ounces of gold, up from 11,980oz in the December quarter.

That included a record month in March, with 5,845oz produced.

Calidus managing director Dave Reeves told the Resources Rising Stars Gather Round Conference in Adelaide today that Warrawoona was “going swimmingly”.

“We had a bit of a slow start in Q1 and Q2 as we moved through a cutback,” Mr Reeves said.

“[But] we’re quite confident this quarter will be our best ever by quite a margin.”

As well as ore from the main Klondyke pit, Calidus will treat ore from the satellite Blue Bar pit this quarter, which is expected to add 5,000 to 6,000oz of gold.

The company has maintained guidance for the June 2024 half of 32,000 to 37,000oz of gold.

‘Shackles off’

Last month, Calidus restructured its balance sheet, which Mr Reeves referred to as “ripping the band-aid off”.

The restructure comprised a discounted A$16.5m placement and the restructure of debt and hedging arrangements with Macquarie.

Hedging volumes for 2024 were reduced by 21,250oz and debt repayments for the year were lowered by A$11m.

Based on the current spot gold price of $3,500 an ounce, Reeves said the agreement would boost Calidus’ cashflow by A$35m this year.

“We’ve taken the shackles off,” he said.

Calidus sold 14,153oz of gold in the March quarter with 8,903oz sold at spot prices.

Bulletin development

The increase in cashflow will allow Calidus to develop the high-grade A$17m Bulletin deposit in the second half of this year.

Calidus’ hedge book stands at 78,000oz at an average price of A$2,370/oz, more than A$1,100/oz below current spot prices.

Reeves said it had been a “holdback” for the company.

“There’s a cap on us because of that but the fundamentals of the underlying business are sensational,” he said.

Calidus has a three-year strategy to deliver 120,000ozpa of gold from the 2027 financial year, up from around 60,000oz this financial year.

All-in sustaining costs are forecast to fall from A$2,620/oz in FY24 to A$1,989/oz in FY25.

Calidus had A$12.2m cash at the end of March, after a debt repayment of A$8m.