A newly discovered high-grade sulphide zone at the Wildara property in Western Australia has partners
Hole LWDD 452 returned 4.83% nickel and 0.49% copper over 10.68 metres, starting 153 metres down-hole. Within that is a higher-grade section of matrix-supported sulphides measuring 5.82 metres in core length and averaging 7.68% nickel and 0.81% copper.
A second hole was collared 50 metres to the west to test for downdip extensions but had to be abandoned after passing through structurally complex rocks. Accordingly, a down-hole geophysical survey is under way.
Both holes were testing an electromagnetic anomaly detected last year at the base of a high-magnesium ultramafic intrusion. Several other anomalies remain untested.
Sulphide mineralization is disseminated in the ultramafic host, except in the higher-grade core, where it accounts for 50-70% of the matrix.
Drilling continues.
LionOre owns 60% of the Wildara project and manages exploration. The remaining stake is held by Dalrymple.
The property lies 6 km from the companies’ developing Thunderbox gold project, which is scheduled to pour its first dor bar in the fourth quarter. That project too is held 60% by LionOre and 40% by Dalrymple.
Construction is expected to begin shortly and take nine months to complete, at a cost of US$33 million. The capital cost is being financed with a 4-year limited-recourse debt facility provided by Australian-based Macquarie Bank.
The proposed open-pit operation is expected to crank out 220,000 oz. in the first year of commerical operations and 150,000 oz. per year thereafter. In all, about 800,000 oz. are expected to be poured over five years.
Reserves are pegged at 10.9 million tonnes averaging 2.43 grams gold per tonne. The estimate is based on a gold price of US$254 per oz. and a cutoff grade of 0.7 gram for oxidized material and 1.1 grams for primary material.
Cash costs are expected to average US$157 per oz. over the life of the mine but just US$110 per oz. in the first year. Initial costs are lower on account of the higher grades and softness of the oxide ore.
About half the mine’s production has been hedged through Macquarie Bank at a flat forward price of US$293 per oz., or about US$35 per oz. more than was used in the bankable feasibility study.
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