Milling agreement fast-tracks Gold Duke into production – Western Resources
Junior gold developer Western Gold is fast-tracking its transition into a gold producer with a binding toll milling agreement placing its Gold Duke project in Western Australia on a path to accelerated production.
The ASX-listed company on Wednesday announced an agreement with Wiluna Mining Corporation (WMC) to haul ore from Gold Duke to the processing plant, which is 46 km away.
The toll milling agreement duration is 24 months, unless extended by WMC by an additional six months. This ensures the entirety of Stage 1 of the Gold Duke project will be processed with capacity for potential extensions through its Stage 2 prospects. This allows Western Resources to lock in its Stage 1 production, while developing Stage 2 for potential extensions.
“This marks a monumental leap forward for Western Gold Resources and with gold prices surging, all mining approvals in place and a preferred contractor selected, we are well positioned to accelerate our transition to a gold producer,” said MD Callum Winn.
Meanwhile, Western said that it was well advanced in updating its scoping study, which previously reported a 617% internal rate of return at a A$3 500/oz gold price. Gold prices are currently exceeding A$5 100/oz.
The current scoping study production target generates an estimated undiscounted accumulated cash surplus of A$38.10-million, after payment of all working capital costs and pre-mining capital requirements. The company expects to release an updated scoping study next month.
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