The project has a production target of 447kt grading 2.55g/for 34 koz of recovered gold. Pic: Getty Images
Western Gold Resources taps mining contractor for near ‘shovel ready’ WA gold project
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- WGR has selected SSH Group as the preferred mining contractor for the Gold Duke project
- Deferred payment arrangement expected to support WGR’s cash flow
- Company plans to investigate toll treatment or ore purchase options for the project
Special Report: Western Gold Resources has appointed mining contractor SSH Group as the preferred mining contractor for its Duke gold project in WA with a deferred payment arrangement set to support cashflow.
The project has a resource of 3.25Mt at 2.1g/t gold, for 214,000oz of contained gold and existing mining approvals at the Eagle, Emu, Golden Monarch, and Gold King deposits that host 61% of those resources.
The company recently defined a maiden indicated resource at Gold King of 251,000t grading 2.02g/t gold, for 16,000oz of the precious metal, increasing confidence in Gold Duke resources as it carries out technical and economic studies that will help push the project along the development pathway.
A scoping study released in late September estimated that a project producing a total of 34,000oz of gold would generate an estimated undiscounted accumulated cash surplus of $38.01m using a $3500/oz Australian gold price.
First-stage production would focus on a portion of the four deposits across Eagle, Emu, Gold King, and Golden Monarch, which has a production target of 447Kt at 2.55 g/t gold for 34,000 oz.
Now, Western Gold Resources (ASX:WGR) has appointed SSH Group (ASX:SSH) to manage all aspects of operations, with SSH proposing a capital facility under a deferred payment arrangement, designed to support WGR’s cash flow as it begins operations at Gold Duke.
Approaching ‘shovel ready’ status
SSH Group and its strategic alliance partners are positioning the Gold Duke project for successful development and operations in the near term, WGR noted.
“The issuing of a notice to our preferred mining contractor, SSH Group, marks another significant milestone as we advance the Gold Duke Project toward ‘shovel-ready’ status,” WGR managing director Cullum Winn said.
“This achievement builds on recent milestones, including increased confidence in our Gold King deposit, excellent metallurgical test results, and expanded mining proposal approvals for the Gold King deposit.
“These developments further strengthen our position in ongoing discussions with potential processing plants located within an economic distance of the Gold Duke project.”
The appointment will become a binding agreement on the execution of the Master Services Agreement with SSH Group, which will be subject to key internal milestones, including the execution of a toll treatment or ore purchase agreement and a final investment decision by the WGR board.
The company is now in detailed discussions with multiple nearby processing plants within an economic distance of the Gold Duke project.
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.
