Western Gold Resources raises $1m to move Gold Duke towards production

• Western Gold Resources raising >$1m, well supported by long-term gold investors including the Investius Microcap Fund, to advance Gold Duke towards stage 1 production
• Funds will be used to select processing option, update scoping study and finalise infill drilling plans
• Company continuing to advance discussions on processing as gold prices continue to climb

Special Report: Professional and sophisticated investors, including long-term gold investors such as the Investius Microcap Fund, have demonstrated their support for the company’s push to advance Gold Duke towards production by backing a $1.05 million capital raising.

Funds raised through the placement of 24.78 million shares at 4.25c each will be used to finalise negotiations and select a gold processing option, update the September 2024 scoping study and finalise stage 1 grade control and infill drilling plans.

Western Gold Resources’ (ASX:WGR) Gold Duke in WA’s Northern Goldfields is a shovel-ready project with a resource of 3.25Mt at 2.1g/t for 214,000oz of contained gold.

The planned stage 1 development will focus on the production of 34,000oz from the Eagle, Emu, Gold King and Golden Monarch deposits.

Based on the gold price of ~$3500/oz in September 2024, this would generate an estimated undiscounted accumulated cash surplus of $38.1m with capex estimated at between $2.1m and $2.5m.

This could be hugely conservative as the combination of rising gold prices and the ongoing weakness of the Australian dollar against the US dollar has nudged the Australian price of the precious metal up close to the $5200/oz mark.

Managing director Cullum Winn said the successful capital raise significantly strengthened the company’s financial position and enhanced its ability to progress Gold Duke through its initial stage 1 development.

“The timing is particularly favourable, coinciding with strong gold market conditions as we advance discussions on gold processing and we welcome to the register the strongly performing Investius Microcap Fund,” he added.

The placement includes the issue of one free attaching option exercisable at 15c and expiring 12 months from the date of issue for every two shares subscribed for.

Gold Duke project

WGR recently secured mining approvals for the Gold King deposit, which clears stage 1 for development.

Metallurgical testing has highlighted the potential for excellent gold recoveries of up to 95.1% using a conventional crush, grind and carbon-in-leach process.

This lends itself to a rapid development with the company planning to be in production within 7-8 months of signing a toll treatment or ore purchase deal.

Discussions are underway with multiple plant owners in the region, the closest being Wiluna, less than 50km away.

There is also potential to grow Gold Duke through further exploration though the company is also keen on advancing the project to a stage 2 development.

A review of brownfield targets within the asset area such as Bottom Camp, Joyners Find, Emu/Eagle Saddle Zone, Gold King and Gold Monarch Saddle Zone has highlighted the potential to add project scale, operational flexibility and enhance cash flow.

Most of these prospects are within the DEMIRS (Department of Energy, Mines, Industry Regulation and Safety)-approved disturbance area and are outside the proposed optimised pit designs for the Stage 1 development.

 

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.