Saracen’s Thunder Down-Under
(not verified)
ASX listed Saracen gives the Thunderbox Goldmine in Western Australia an A$65 million thumbs up for development.
The good news comes after the completion of a feasibility study, which will now make Thunderbox the first major gold project to reopen in WA this year and a mid-tier gold producer that will see production double to around 300,000 ounces per annum by 2017.
Managing Director, Raleigh Finlayson said, “The development approval for the Thunderbox Operations is a significant milestone for the Company that will see Saracen produce gold from multiple operations for the first time in our history.”
The Thunderbox feasibility study began back in January 2014 after Saracen announced the acquisition of the Thunderbox Operations. Pre strip mining at the site is set to commence in August 2015 with processing at an expected average production rate of 124,000 ounces per annum over the initial 4 year stage 1.
“Thunderbox Stage 1 is forecast to deliver A$195 million of free cash-flow over an initial 4.5 year mine life that endorses the company’s acquisition of the Thunderbox operations in January 2014 for a total cash consideration of A$23 million and royalty payments of 1.5% capped at A$17 million.” Mr Finlayson said.
Mr Finlayson went on to say, “We have put the old team back together again to develop Thunderbox with Lee Stephens, Wayne Heedes and George Viska all heavily involved in the refurbishment and the resumption of mining at Carosue Dam in 2009 and now again at Thunderbox in 2015.”
With the development and delivery of stage 1 expected to see around 550,000 ounces over its for-and-a-half year mine life, stages 2 and 3 could extend the mine life to 8 years and in excess of one million ounces at an average of 126,000 ounces per annum.
The Saracen Board noted it was the perfect time for the Thunderbox gold project, citing a falling Australian dollar, lower diesel prices, high open pit mining equipment availability, and a tightening in the labour and contracting markets all helping to create an ideal development environment.
It was also noted that the timing of the development fitted in perfectly with the completion of the open pit mining at Whirling Dervish, which would allow a smooth transition for the open pit mining workforce to Thunderbox.
The Board also pledged ongoing assessment of gold spot prices up to August 2015 prior to the beginning of the strip-mining phase and before any major expenditure was incurred. This was considered consistent with the risk adverse approach undertaken in the past.