Calidus Resources’ (ASX:CAI) shares saw modest gains of 3.23 per cent at 12.30 pm AEDT today to 16 cents after the company posted a maiden probable reserve resource, and Pre-Feasibility Study (PFS), attached to its Bulletin deposit.
The big takeaway: geotechs now switch their focus to Bulletin and production is proposed to start later this year “once fully permitted”.
Bulletin is an asset within the larger WA-based Warrawoona Gold Project in the lucrative Pilbara region – Calidus is already a gold producer and seller, but, today’s solidification of metrics around the Bulletin deposit were described as a “step change”.
Calidus calls itself “Australia’s newest gold producer” on its website.
Its maiden JORC reserve metric for Bulletin reflects it’s interpreted to contain 600,000 tonnes of ore at 2.86 grams per tonne (g/t) of gold for 55,000 ounces (oz).
Inferred resources – a lower confidence category – attached to an open pit are included in that reserve, the inferred is for 100,000 tonnes of ore at 2.55g/t gold for 8000oz.
On the back of that reserve, Calidus has inked and published a PFS for Warrawoona, giving shareholders two major steps forward in the pipeline toward production.
But the metrics of that PFS may be underwhelming to some, explaining relatively small gains for a company that claims it’s entering the gold-producing hall of fame.
Case in point: the mine life is estimated to last for only two years.
The company sees an all-in-sustaining cost (AISC) of $1730 per ounce of gold – with prices currently at A$3093.60 as of 12.45 pm AEDT, which leaves over $1363.
Without getting too deep into other considerations, prima facie, that implies $74.96 million in sales. Things aren’t that easy, but, that’s what shareholders were looking at on Thursday.
(Consider that the average sales price of Calidus was A$2377/oz in its latest quarterly.)
Calidus stated that mineralisation at Bulletin remains open at depth.
“This maiden reserve and PFS confirms the high-grade Bulletin deposit will be significant in driving production growth and increasing cashflow generation at Warrawoona,” Calidus chief Dave Reeves said.
Calidus has a microcap of $98 million and one-year returns are down 31.91 per cent.
However, brokers are bullish – four different brokers rate the stock a ‘Buy’; one broker rates the stock a ‘Hold’; and zero brokers covering the stock rate it a sell.
CAI shares last traded at 15.8 cents.