Calidus launches hunt for more Pilbara gold

Gold developer, Calidus Resources is set to unleash the rig for a regional gold search aiming to grow its existing 1.7 million ounce resource base in the Pilbara region of Western Australia. The company will drill-test multiple greenfields targets near its Blue Spec resource and in proximity to its multi-deposit Warrawoona project that is set to churn out 90,000 ounces of gold per annum from next year. First production at Warrawoona has been tabled for the June quarter of 2022. To date, Calidus has defined about 1.5 million ounces of the precious yellow metal at the project. Calidus now plans to sink 13 RC holes to test the strike extent of a four kilometre shear zone located about 8km from its Klondike deposit at Warrawoona. The company believes limited historical drilling into the shear was likely too shallow to adequately test the structure, although some gold mineralisation was intercepted. Elsewhere at Warrawoona, a small RC campaign will target about 350 metres of strike along a quartz reef located in the historical Marble Bar goldfield. According to the company, some 1,300kg of gold was produced from the reef prior to 1950. Drilling adjacent to the reef in the 1980s by past explorers returned 3m going 3.07 grams per tonne gold from 17m and 1m grading 4.33 g/t gold from 19m, according to Calidus. A further six RC holes drilled near the reef in the 1990s also struck gold, including a respectable 8m at 4.45g/t gold from 16m and 4m at 4.43g/t gold from 16m. At Blue Spec, about 70km from Warrawoona, Calidus has so far defined 219,000 ounces of contained gold at a remarkable 16.3 g/t from the combined Blue Spec and Gold Spec deposits. The company aspires to incorporate the Blue Spec gold resources into its proposed mining operation at Warrawoona and boost production numbers to 130,000 ounces per annum. Recent drilling for an ongoing definitive feasibility study evaluating the prospects of bringing Blue Spec to life returned some sensational hits, including 4.1m at 33.6 g/t gold, 2.55m at 44.1 g/t gold and 3.1m at 20.4 g/t gold. Perhaps the high-grade hits should not have surprised given previous drill results at the deposit unearthed a mind-boggling 25m intercept grading an astounding 255 g/t gold and an incredible 51m hit going 98.3 g/t gold. Calidus is now looking to hunt down more ounces in the project area with 14 RC holes set to tackle the nearby Blue Spec East prospect and gauge potential for shallow mineralisation amendable to open pit mining. Previous drilling at Blue Spec East uncovered some notable intercepts, including 38m grading 3.42 g/t gold, 11m going 7.53 g/t gold and 18m at 4.21 g/t gold. Another five shallow RC holes will target an untested 450m strike of quartz veining at the project. Calidus projects 90,000 ounces per annum of gold production over eight years from a 702,000 ounces mining inventory at Warrawoona. A post-tax capital payback period of only 15 months has been estimated for the venture based on a gold price of $2,355 an ounce. EBITDA has been forecast to average $92 million a year with all-in sustaining costs of $1,290 an ounce across the life of mine. Incorporating the Blue Spec resources into the Warrawoona operation could boost the mining inventory to 876,000 ounces of gold and see production swell to 130,000 ounces each year, according to Calidus. Results from the Blue Spec definitive feasibility are due in the June quarter next year. Calidus seems on its way to churning out plenty of ounces at Warrawoona and Blue Spec. Any regional success with the drill bit likely to provide a further boost to the economics of the proposed Pilbrara gold mining operation. Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au