Gold: Beacon lights up with acquisition near +685,000oz Apollo Hill
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$80 million market cap Beacon Minerals (ASX:BCN) is accelerating into gold production at the right time.
The WA-based Beacon is developing the small but low cost 163,100oz Jaurdi gold project near Coolgardie.
The company is now commissioning the gold processing facility at Jaurdi, with the full ~27,500oz per annum production run rate expected in the fourth quarter this year.
A Project Pre-Feasibility (PFS) outlined a forecast life of mine surplus operating cashflow of $98.4 million.
But this was based on a gold price of $1,650 per ounce versus today’s gold price of +$2,000/oz; a narrative which has also helped propel the stock to a 12-year high.
Good times for Beacon and its shareholders:
Jaurdi going to cost an estimated $21.4m to build, and once running full throttle, will be producing gold at an industry leading, all-in sustaining cost of $870/oz.
$2000 (gold price) minus $870 (costs) = an excellent profit, if everything goes to plan.
But the project is small, so Beacon continues to assess potential project acquisitions “within economic distance” of the Jaurdi mill to bolster that mine life.
Today, the company announced plans to potentially buy the Stockdale prospect, 66km from Leonora.
It may not be “within economic distance” of Jaurdi, but Stockdale is right next door to Saturn Metals’ (ASX:STN) 685,000oz Apollo Hill deposit, about 200km from Kalgoorlie.
It’s underexplored, Beacon says, with activity to date limited to soil and rock chip sampling and shallow aircore drilling.
This work has defined a pretty substantial soil anomaly (1km by 300m) which could act as a ‘sign post’ to a deposit deeper down.
As part of the option agreement, Beacon now has 28 months to undertake exploration at Stockdale which includes a 2000m RC drilling program.