The first gold is expected to be cast in the fourth quarter of 2022 – with a final investment decision expected before the end of this year.
A definitive feasibility study completed earlier this year predicted an average production of 136,000 oz / year, positioning Bardoc as one of the largest new gold mines expected to go into production in Australia in the coming years.
And that’s just to start. The vast resource base and huge exploration potential means Bardoc will be more than a flash in the pan.
“We have an eight-year lifespan based on the million ounces of reserves declared in our feasibility study. But we also have 3 million ounces of resources – so we see significant potential to expand our plan. current production, ”Bardoc CEO Robert Ryan said.
“We are currently conducting a number of project improvement studies, looking to create additional opportunities, develop open pit and additional drilling areas to upgrade some inferred resources to fit into the plan.
“We have positioned ourselves on a platform for growth – having developed our mining plan to show that we will increase our production from about 120,000 ounces per year to about 150,000 ounces and more per year from the fourth year. .
“We see ourselves as becoming a true mid-level operator and to do that you need a single operation producing over 150,000 ounces / year – with the potential to eventually grow somewhere around that 170,000 level to 180,000 ounces / year. That’s where we see this project heading and we have a five-year plan in place to make it happen, ”Ryan said.
Part of the WA-based company’s plan is to develop a stand-alone 2.1 million tonne / year gold processing and flotation plant – which offers further benefits given its strategic location.
“In the fantastic position where the mine is – just north of Kalgoorlie – there are a lot of stranded assets with good quality resources that don’t have the capacity to justify a stand-alone processing plant.
“Bardoc itself was born out of a consolidation to justify the stand-alone treatment operation and, as we begin to look to the future, I think we can offer this opportunity to others – be it on a merger and acquisition basis, or be it toll processing basis, ”he said.
Australia is the second largest gold producer in the world and Eastern Goldfields is its first gold province. The country has 14 of the world’s largest gold mines, 11 of which are based in Western Australia. If the state were a country, it would be the fifth largest producer of gold in the world.
“We’re in a perfect position to take advantage of it,” Ryan said.
“There is no better place to build a gold mine than Kalgoorlie. It is a leading mining jurisdiction, close to infrastructure and many local amenities,” noted the CEO.
Bardoc’s final feasibility study from March 2021 shows the NPV of 6% and the after-tax IRR for the project at a gold price of A $ 2,100 per ounce at A $ 283 million and 30%, respectively . This improves to A $ 365 million and 38% at a gold price of A $ 2,250 / oz.
“When we start to look at the value of the project, the total NPV of the project at current gold prices would exceed A $ 450 million. Now if we start to consider where the opportunity lies with some of our current projects – probably two of the greatest values drivers are the underground Zoroastrian and Aphrodite deposits.
“At steady state production, the Zoroastrian subsoil will produce about 60,000 ounces per year, and the Aphrodite subsoil will produce 100,000 to 110,000 ounces per year. And we all know that most of the mines in gold fields can start with four or five years mine lives, but they end up lasting seven to ten years and more.
“There is no better place to build a gold mine than Kalgoorlie. It is a leading mining jurisdiction ‘
– ROBERT RYAN
“So we see a lot of opportunities to be able to leverage the lifespan of operations through basement extensions. And they add a lot of value based on NPV. We did some blue sky style scenarios, looking at what a potential year of mine life would look like in terms of cash flow at Zoroastrian, and that potentially adds A $ 50 million in free cash flow to the project. .
And the project has a low all-in sustaining cost for the life of the mine, of around $ 1,188 A / oz.
“In the long term, we have a high margin on the project. At the moment we are sitting on a gold price of around AU $ 2400 / oz and that really gives the project in its current format some exceptional financial measures.
“With our all-inclusive sustaining costs, that means that with any movement in the price of gold, we will always have a fantastic project ahead of us,” he said.
Bardoc has attracted a range of high-caliber global traders vying for drawdown deals. After reviewing them, in December, the company chose MRI Trading – the world’s largest independent trader of non-ferrous concentrates.
This will allow MRI to manage the sale of Bardoc gold concentrates – which represent approximately 54% of expected production over the life of the mine.
“Having someone like MRI Trading on board is really great. The drawdown agreement not only gives us certainty over the production of our gold concentrate, but it also gives us a partner who has international standards and connections. strong throughout the Asian community.
“They are a fantastic group to get involved with,” he said.
With the final mining plan quickly taking shape and a long-term mining partner secured, Ryan – who spent 18 years living and working in Kalgoorlie – is eager to show the market what the Bardoc management team can do. with a working mine.
“There is a lot of potential for us once we get into mining and we can’t wait to show the market what we can do. We will continue to develop this operation – well beyond what we put in the DFS earlier this year. where the opportunity lies.
“The real strength of the team is our ability to operate the mines and our experience working in the Kalgoorlie area.
“I think the current share price position does not accurately reflect where we should be. With the quality of the team, resources and operations that we have, there are many opportunities for Bardoc to. exceed expectations for stock price. growth, ”he said.