Supersize me: De Grey aims for over 100,000 ounces a year at Pilbara project
Mining & Resources
Special Report: De Grey is doubling the size of its Pilbara Gold Project study as it sets its sights on the 100,000 ounce per year gold club.
With a massive two million ounce gold resource targeted by the end of the year, De Grey Mining (ASX:DEG) says it wants to supersize its Pilbara Gold Project development study from 1mtpa to 2mtpa.
This could boost De Grey’s vision of annual gold production from 65,000 ounces to beyond 100,000 ounces – potentially putting it in a select club upon the start of production.
100,000 ounces is worth more than $180 million a year at today’s gold prices of over $1800 an ounce.
With Australian production costs ranging between $800 and $1200 an ounce, most Australian gold producers are currently making cash hand over fist.
And many analysts are bullish on where gold goes from here.
In January, Goldman Sachs predicted the gold price could go even higher in 2019 to $US1425 an ounce; that’s almost $2000 an ounce for Australian gold producers.
De Grey says aiming for a bigger production profile makes sense as they see resources continuing to grow, whilst economies of scale kick in and are significant whilst improved gold recovery to between 90-94 per cent also ratchets up the project economics.
De Grey wants to expand its resources to three million ounces, with two million ounces targeted by end of 2019, with resource extension drilling rapidly advancing with 2 drill rigs operating on site.
The potential for along strike potential at each of the open pits and high grade underground lodes beneath some of the deposits underline the blue-sky potential at the Pilbara Gold Project.
De Grey has also tapped experienced company GR Engineering which is nearing completion on the design and costing of a two million tonnes per annum processing plant, which would be completed to a pre-feasibility study standard.
Cube Consulting would then revise its open pit optimisations based on the new operating and mining costs.
De Grey is an exciting Australian gold growth story with near-term development opportunity in one of the world’s best mining jurisdictions, chairman Simon Lill says.
“Our vision is very simple; we have our foot on a significant new gold province and we plan to grow resources towards 3 million ounces and ultimately develop a new standalone +100,000-ounce gold mining operation,” Mr Lill says.