Primary Gold gets go ahead to start commissioning Coolgardie gold project

Primary Gold ASX PGO Coolgardie project commissioning
Primary Gold's Coolgardie gold project.

Primary Gold (ASX: PGO) has gained the final approval needed to start mining by the end of March at its 100%-owned Coolgardie gold project in Western Australia.

The company received the last regulatory approval from the Western Australian Department of Mines, Industry Regulation and Safety, and now plans to begin commissioning the project.

“Having received full approvals to commence mining at our Coolgardie operations, we can now move on to next steps of setting up site for mining,” Primary Gold managing director Garry Mills said.

“As firm schedule can now be put in place for mining of first ore and hence timing of processing ore parcels to be scheduled for toll treating,” Mr Mills added.

The company completed a pre-feasibility study in mid-October last year that revealed the project had a maiden start-up inferred mineral resource of 69,000 ounces of contained gold, which could be extracted over a 28-month period via open pit operations.

The study predicted cash flow of about A$16.9 million based on the A$1,600 per ounce gold price and all in cash costs of A$1,340/oz.

With the gold price currently sitting at A$1,685/oz, Primary Gold could generate substantially more revenue if the price prevails or maintains its upward trajectory.

Primary Gold had a memorandum of understanding to negotiate toll treating its ore with Westgold Resources (ASX: WGX) which expired on 31 December 2017.

With the granting of the final approval, Primary Gold claims it will finalise its toll treatment plans and other key contracts.

Situated in the goldfields region, the Coolgardie project encompasses about 3,000 hectares and hosts eight historical open pit mines.

Commissioning of the project was previously targeted for the December 2017 quarter but was dependent on gaining requisite approvals which the company now has.

The news of the final approvals follows the resignation of Marat Abzalov as executive director.

Mr Mills said the board going forward would comprise himself as chairman and managing director and non-executive directors: Dr Mark Qui and Tony Patrizi.

By late morning trade, shares in Primary Gold were up more than 15% to A$0.045.

    Join Small Caps News

    Get notified of the latest news, interviews and stock alerts.