Calidus Gold Portfolio
Keras holds a significant interest in Calidus Resources Ltd, an ASX listed company, which is exploring and developing the Warrawoona Gold Project, which is located in a significant gold belt in the East Pilbara District of the Pilbara Goldfield of Western Australia.
The project at a glance
- Global JORC compliant resource of 21.3Mt @ 1.83g/t Au for 1.25 million ounces declared in February 2019
- Mineral Resource contains a high-grade component estimated to contain 14.6Mt @ 2.37g/t Au for 1.1 million ounces of which 64% is classified in the Indicated category
- Significant upside potential remains at Warrawoona – mineralisation outcrops at surface and is open along strike and down dip at all deposits
- Excellent drill results in July 2019 underpin a potential resource upgrade, results included intercepts of up to 1m @ 107.16g/t Au from 36m
- Majority of the resource is located at the Klondyke Shear Prospect however the resource remains open both at depth and along strike where the resource is defined from just 2.6km of the main 12.5km strike length identified
- Initial optimisations show robust open pit mining metrics given the large tonnage, near surface nature of the resource
- Positive Pre-Feasibility Study and Maiden Mineral Reserve completed and announced in July 2019, notable results as follows;
- 97,000ozpa average gold production over the 6-year LOM
- 9Mt @ 1.5g/t for 418koz Probable Reserves
- Au$95m capital cost of including contingency
- AuS$367m LOM pre-tax cashflow
- Au$234m NPV (pre-tax 8%)
- 56% IRR (pre-tax)
- Positive results from PFS and Maiden Mineral Reserve indicate robust cashflows and additional upside with potential upgrades in the mineral resource;
- 12-month processing plant construction, infrastructure and mine development pre-production phase, followed by a 6-year mine life
- o Average 97,000oz per annum gold production over the 6-year mine life via a 2mtpa conventional cyanide in leach processing circuit with single stage crush and SAG mill
- Well serviced by existing infrastructure
- Drilling commenced on a number of new prospects targeting additional Resource growth
Project Location: located in an area with proven resource potential
The Warrawoona Gold Project is situated in the East Pilbara district of the Pilbara Goldfield of Western Australia, approximately 150km south east of Port Hedland and approximately 25km south east of the town of Marble Bar.
Historically fragmented ownership has held back development of the area but Calidus has now built a significant land package to control the well-mineralised Warrawoona Gold Belt.
There is currently a dislocation in the Keras market capitalisation compared to the see-through valuation from its interest in Calidus. See valuation comparisons in Project Value below.
Warrawoona Mineral Resources:
- Global resource of 21.3Mt @ 1.83g/t Au for 1.25 million ounces;
- Includes high grade component of 14.6Mt @ 2.37g/t for 1.1 million ounces
- 64% of the Mineral resource is classified as Indicated Resource
- the Klondyke Prospect, which has a current 2012 JORC Code compliant Resource of 20Mt at 1.79g/t Au for 1.5 million ounces and includes 750,000 ounces in the Indicated Category;
- Maiden JORC compliant Probable Ore Reserve of 8.9Mt @ 1.5g/t for 418koz Au at the Klondyke Prospect
- the Copenhagan, Coronation and Fieldings Gully Prospects have a combined current 2012 JORC Code compliant Inferred Resource of 1.2Mt at 2.53gt/Au for 98,000 ounces;
- Further upside remains via a number of additional target areas within the Warrawoona project area, which covers a total of just over 550sq km of tenure;
- the Warrawoona Gold Project Mineral Resource Estimate table that appears on the Calidus Resource & Reserve page- https://www.calidus.com.au/
Calidus is seeking to rapidly advance Warrawoona by way of a major drilling and exploration programme and feasibility studies, with an initial focus on Klondyke.
Keras currently owns 33.8% interest in Calidus .
Keras’ interest in Calidus provides strategic value upside:
Keras acquired the Klondyke Project in October 2016 and through a combination of debt and equity financing undertook a confirmatory drilling campaign in the first half of 2017. The confirmation of high-grade intersections and mineralised continuity led to the successful listing of Calidus Resources Ltd on the ASX in June 2016. On listing Keras was issued 217m ordinary shares in Calidus and two tranches of Performance Shares of 265m and 241m each with attached milestones.
The first tranche of Performance Shares, totalling 265m shares in Calidus, were issued on 18 December 2017 following the publication of a total Mineral Resource at the Warawoona Project, of 10.5 Mt at a grade of 2.11 g/t Au containing 712,000oz Au.
The second tranche of performance shares, totalling 265m shares, have been issued following the announcement of a positive pre-feasibility study which demonstrates the project is commercially viable. Keras intends to distribute its Calidus shareholding pro-rata to Keras shareholders, with the distribution expected by the end of 2019.
The chart below shows the disconnect in value between the Keras market capitalisation and the see-through value of the Company’s holding in Calidus. This chart illustrates the upside potential in the Keras share price due to the lag in performance relative to Calidus.
* Tranche 3 Performance Shares triggered by completion of Klondyke PFS
More information can be found at www.calidus.com.au