Bonanza gold hits boost EganStreet as it closes in on new WA mine development
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Special report: Gold developer EganStreet Resources has been buoyed by some impressive new gold hits immediately south of the high-grade 401,000oz mineral resource at its Rothsay gold project near Perth.
The $26 million junior (ASX:EGA) told the ASX in a statement today that the first two holes drilled as part of a new 4,000m diamond drill program at Rothsay had intersected zones of 0.97m grading 129.2 grams of gold per tonne and 2.6m grading 22.6 g/t.
Anything above 5 g/t gold is considered high grade.
The results confirm that mineralisation on the key gold-hosting structures at Rothsay, the Woodley’s and Woodley’s East Shears “remains open to the south in an area that has never previously been drilled”, EganStreet said.
Visible gold was logged in a further four holes of the program, for which assays are pending, indicate “strong promise”, said managing director Marc Ducler.
“Given the high-grade of these latest intersections, in-fill drilling in this area has the potential to increase the current 401,000oz Resource,” Mr Ducler said.
“We are planning further diamond drilling to extend drill coverage in the south, with shallow reverse circulation also planned to test up-dip extensions of the mineralised shears to the north,” he said.
While ongoing drilling has strong potential to grow the Rothsay Resource, the main game for EganStreet is to bring the high-grade project into production, positioning it to join the ranks of Australia’s gold producers as early as next year.
“We have a great Project at Rothsay which has a number of standout attributes, notably its exceptional resource grade of 8.8g/t gold, its relatively low capital cost and its Tier-1 location just four hours drive north of Perth,” Mr Ducler said.
EganStreet is hoping to follow in the footsteps of some of its bigger gold peers such as Dacian Gold (ASX:DCN) and Gascoyne Resources (ASX:GCY) as it commences construction and development in the coming months.
Dacian started commissioning its 200kozpa Mt Morgans project earlier this year, and is now well into the ramp-up phase, while Gascoyne has recently brought its 100kozpa Dalgaranga project on stream.
EganStreet completed a Definitive Feasibility Study (DFS) on its Rothsay Project in July 2018, with the study outlining a low CAPEX, high-margin gold operation underpinned by a high-grade 200,000oz Ore Reserve.
In the update released earlier today, the company says it has made “excellent progress” with pre-development activities since handing down the DFS in July.
“Initial site-based civil works are scheduled to commence as early as next month, with major construction activities scheduled for Q1, 2019 and first gold targeted for Q4, 2019,” EganStreet said.
“Procurement of major packages is progressing well and project approvals are now in their final stages,” it added.
The Rothsay DFS forecast gold production ramping up to 60,000 ounces-a-year over an initial 6.5-year mine life, with forecast all-in sustaining costs of A$1,083 per ounce.
The project has a forecast capital price tag of just $36.1 million, and is expected to generate undiscounted pre-tax project cash-flow of $100 million over its life.
EganStreet has mandated PCF Capital to complete a financing package for the project next quarter, paving the way for a development decision.
This special report is brought to you by EganStreet Resources.
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