Wiluna Mining Corporation Limited (ASX: WMC) has reported on the outcomes of a pre-feasibility study on a potential restart of mining operations for Wiluna, undertaken by Mining One.
The Deed Administrators of Wiluna have asked Mining One to author the PFS with the aim of developing an operational foundation for Wiluna, based on conservative operating parameters, which would contemplate robust economic returns and the establishment of critical life of mine infrastructure that could then be utilized for sustained production or growth options.
The main constraint on the study was limiting the required restart capital to an amount considered viable for a recapitalization of the Wiluna balance sheet given its status as a company subject to a Deed of Company Arrangement. This resulted in a PFS that supports a projected 9.5-year operation that would prioritise sulphide material and restart BIOX processing at Wiluna, supported by the existing operational CIL circuit. These processing circuits would be fed initially by an open pit mine, later transitioning to underground mining. Tailings mining and tailings retreatment through the Wiltails repulper would also continue throughout. With the BIOX circuit refurbished, the operations would produce gold doré on site, removing difficulties associated with high arsenic gold concentrate, reduce transport costs, and improving gold payability.
The PFS is constrained by assuming limited capital available for Wiluna development, not potentially available gold resources. The PFS assumes use of less than 7% of underground gold resources. Based on preliminary upside scenario analysis by Mining One, for parties with larger capital availability, significantly larger operations can be contemplated, having regard to estimated gold resources. Wiluna will shortly commence a strategic review of the best way forward for the company by inviting parties interested in recapitalization options for the company, provision of funding or in the opportunity to acquire some or all of Wiluna’s assets. A complete copy of the PFS accompanies this announcement, and investors are strongly encouraged to read the PFS in full, as well as the Important Notice that immediately follows the below highlights.
Highlights of the PFS include a production target of 750Ktpa of gold ore to be processed, producing an average of 67,500oz of gold per annum over a proposed 9.5-year life of mine. Projected all in sustaining cost (AISC) of A$2,015/oz, C1 costs of A$1,939/oz.
The PFS includes a low-cost growth capex (including refurbishing of BIOX processing facility; tailings thickener and camp upgrade) of A$73M, at base case gold price assumption of A$2,880: LOM free cash flow A$364M, 5.5-year payback, pre-tax NPV8 A$198.6M, IRR 53%. Additionally, the company has estimated a spot case gold price assumption of A$3,084, LOM free cash flow A$488M, 3.75-year payback, pre-tax NPV8 A$282M, IRR 112%.
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