Strong PFS highlights long term potential at Matilda Gold Project
Highlights of the study include:
- Forecasted gold production - 207koz per annum (first 6 yrs);
- LOM AISC - A$1,058/oz;
- 9 Yr mine life (initial) - 19.2Mt at 2.7g/t for 1.7Moz Au; and
- Initial Capital Costs - $114m.
Analyst Comment: Overall this was a positive result for Blackham as the Pre-Feasibility Study highlighted the potential for the Matilda/Wiluna Project to become a +200koz Au per annum operation by 2019.
One of the key difference's between this and previous studies was a significant increase in the open pit inventory (1.1Moz at 2.3g/t Au). The major driver for this was the Wiluna open pits, which until recently was only a small part of the company's long term plan. However since drilling intensified late last year, the company has delineated an ore reserve of 669koz at 2.7g/t Au, which is an impressive achievement in such a short space of time.
Capital costs were largely in line with previous guidance (ES $104m vs. PFS $114m). We did note the inclusion of a Filter Press (Capex $75m) as an alternative option to refurbishing the BIOX Facility ($114m).
This would see the company produce a concentrate rather than dore', which would be discounted to the prevailing gold price (TSI estimate - 10% to 15%). However, given the significant capital cost saving ($39m) and the likelihood that operating costs fall further due to limited back end processing, we believe this option should investigated further, as it would significantly improve the company's ability to raise funds for capital development.
Before the expansion achieving production guidance for the remainder of 2017 is critical, as this will help rebuild confidence in the market regarding the company's ability to meet their targets.
The information in this email should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
Valuation: We have increased our valuation to $0.97 / share (share price $0.28) .
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About Wiluna Mining Corporation Ltd
Wiluna Mining Corporation (ASX:WMX) is a Perth based, ASX listed gold mining company that controls over 1,600 square kilometres of the Yilgarn Craton in the Northern Goldfields of WA. The Yilgarn Craton has a historic and current gold endowment of over 380 million ounces, making it one of most prolific gold regions in the world. The Company owns 100% of the Wiluna Gold Operation which has a defined resource of 6.4 Moz at a grade of 2.1 g/t Au. In May 2019, a new highly skilled management team took control of the Company with a clear plan to leverage the Wiluna Gold Operation's multi-million-ounce potential.
Wiluna Mining Corporation Ltd
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