Western Gold Resources eyes shovel-ready status at Gold Duke

WGR reckons now is the perfect time to get a gold project into production as the bull market for the precious metal continues to run.

WGR released a scoping study late last year based on a gold price of AUD$3500/oz. Pic: Getty Images.

Special Report: With gold prices soaring to almost AUD$4600/oz in recent weeks, Western Gold Resources is perfectly positioned to take advantage of the current bull market with Stage 1 of its Gold Duke project approaching near-term production.

• WGR looks to get Gold Duke project into production this year
• Shovel ready push comes as gold price hovers around the AUD$4600/oz mark
• Company confident of upside and pit optimisation potential

The project has a resource of 3.25Mt at 2.1g/t gold for 214,000oz of gold.

And Stage 1 production will focus on the four deposits across Eagle, Emu, Gold King, and Golden Monarch, with a production target of 447kt of 2.55g/t for 34,000oz.

Based on a then gold price of $3500/oz, the operation would cost just $2.1-2.5m to bring into production and generate an estimated undiscounted accumulated cash surplus of $38.1m, which highlights the upside at current gold prices.

And gold prices have already climbed well above those levels, with Aussie dollar gold fetching $4631/oz on Wednesday.

On the metallurgical front the company reported recoveries of up to 95.1% from testwork at the project – highlighting the potential for excellent gold recoveries through a conventional crush, grind and carbon in leach (CIL) treatment.

That bodes well for Western Gold Resources (ASX:WGR) plans to be in production within 7-8 months of signing a toll treatment or ore purchase deal. The company is already in discussions with multiple plant owners in the region, the closest being Wiluna, less than 50km away.

Full permitted and production ready

WGR managing director Cullum Winn said the company has made tremendous strides toward production at Gold Duke, with mining proposal approvals now secured for the Gold King deposit. This means that the entire Stage 1 of Gold Duke is fully permitted and production-ready. 

Whilst exploration upside exists at Gold Duke along the 22km of Greenstone belt, the company also has its eyes on extending its Life of Mine into Stage 2, recently increasing confidence in the Gold King deposit with an updated resource estimate. 

“Our updated resource estimate of 427,000t at 1.91g/t for 26,000oz has further reinforced confidence in the deposit’s potential,” he said.

“We’ve also selected SSH Group as our preferred mining contractor, who brings strong industry alliances with WA Goldfields mining specialists. 

“Their proposal includes a deferred payment funding facility, providing a non-dilutive funding option that could reduce capital requirements in the project's early stages.”

There are several processing plants in close proximity to the project. Source WGR.

Upside beyond Stage 1

The company has also recently initiated a comprehensive review of the historical Gold Duke database, identifying multiple high-potential mining opportunities to extend the life of mine at the project.

“These opportunities have the potential to enhance cash flow, improve operational flexibility, and expand the project's scale, complementing the existing 34,000oz Stage 1 mining project” Winn said. 

“Such prospects as Bottom Camp, Joyners Find and the Emu / Eagle Saddle have been identified early for further geological review and modelling then potentially mine optimisation works even at this early stage of the review.” Winn said.

“Mineralisation remains open at multiple locations, limited only by current drilling extents. With strong gold prices and shallow, near-surface deposits, WGR is well-positioned to unlock further value from these assets all within the Gold Duke project.” Winn said.

This article was developed in collaboration with Western Gold Resources, a Stockhead advertiser at the time of publishing. 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Western Gold Resources eyes shovel-ready status at Gold Duke