WA’s junior gold miners aim for expansion as metal’s value rises
Junior gold miners in West Australia are gunning into full throttle for their expansion plans, buoyed mainly by the precious metal's skyrocketing value with Integra Mining Ltd leading the hungry pack of the country's future mining giants.
Integra has announced that first gold output should be seen by September in its Randalls projects and barely three years since the site was started, the company projects an output rate of 90,000 ounces per annum (OZPA), which could be furthered to a maximum of 100,000 OZPA once three underground prospects under evaluation begin operation.
Company managing director Christopher Cairns is upbeat that Randalls would prove to be a high-grade project and deliver an operating profit of $75 million by its first year of production, underscoring that "there is no question in our minds that Kalgoorlie is the premier destination for gold in WA."
Even considering a $574 per ounce cost of production and the prevailing market price of gold, Mr Cairns maintained that the project is definitely profitable and "the operation is looking very strong, so what we are doing to increase that is looking at bringing in three high grade underground sites."
Even as the Randalls project appeared promising enough, Integra has already set its eyes on its new pet project in Aldiss, allocating up to $15 million to explore the largely unexplored site 20 kilometre east of Randalls while another encouraging result was delivered by its Majestic prospect, located 22 kilometre north of Randalls.
Mr Cairns is confident that the company's project prospects were all so far returning bright results that project finance should be repaid within 15 months plus waiving the necessity to raise cash in order to fund more projects.
He reminded though that Integra investors would need to count at least three more years before collecting their expected returns, stressing that "funds are better spent by putting back into new projects," and by that time "we will be in a very strong cash flow position which should fund our aggressive growth agenda."
On its part, Navigator Resources Ltd seemed to logically follow the lead of Integra and turned into gold the once dismal state of the Bronzewing gold site as it announced last week that production activities are on track to fetch an output target of 100,000 ounces per annum.
That indeed is sufficiently promising, considering that the site once saw its former operator, View Resources Ltd, going under due to less than expected gold production and a debilitating operational cost at the mine.
Of course, it is a different story at this time and company managing director David Hatch is boasting of their largest shipment of gold seen in the third week of June as he revealed that the site quickly transitioned to production and Navigator is considering extending the mine's life to 10 years from its originally projected span of five years.
Mr Hatch said that the project's gross earnings could potentially reach $185 million at a gold price of $1,250/oz as the price of gold bullion jumped to a record high of $US1,264 per ounce last month with a market spot price of $US1,190 or $A1,395.
As with Integra, Navigator is pursuing its own expansion prospects with its new Leonora project targeted to bring about at least 50,000 OZPA this year, which Mr Hatch said were only one of the potentials that the company has for the project, as he specified that "we have two potential paths for Leonora and we can look at doing a lower capacity facility that might get us to the same place."