Bardoc Gold delivers 1-million-ounce gold ore reserve to underpin long-life, high-margin project

Bardoc Gold Ltd (ASX:BDC) (FRA:4SF) has completed a robust definitive feasibility study (DFS) for its flagship namesake project, which puts the company on a clear trajectory to develop one of the few new gold projects of scale in Australia over the next two years. A highlight is the delivery of a 1-million-ounce ore reserve that underpins forecast average production of 136,000 ounces at an AISC of A$1,188 per ounce. Bardoc chief executive officer Robert Ryan said: “At an assumed base case gold price of A$2,250/ounce, the project will generate on average $113 million in free cash flow per year post-construction, with forecast life-of-mine free cash flow of $740 million, a pre-tax NPV6% of A$479 million and Internal Rate of Return of 41 per cent. “The project has relatively low capital intensity, with a forecast pre-production capital cost of A$177 million and a 32-month payback period from production commencement.”  1-million-ounce reserve Notably, the DFS supports an increase in the open pit and underground probable ore reserve to 15.9 million tonnes at 2.0 g/t for 1,007,000 ounces (at a A$2,000/ounce gold price), representing 88% of LOM metal production forecast. Ryan said: “At the heart of the DFS is a 28% per cent increase in ore reserves to over 1 million ounces – a fantastic result which reflects the highly effective drilling programs conducted over the past 12 months and the excellent technical work completed on our mining and processing schedules to optimise the project to a very high level. “The strong DFS outcomes show that the Bardoc Gold Project is without question one of the best undeveloped gold projects in Australia, with the potential to deliver strong production and cash flows and compelling financial returns over a long period of time from a brand new fully-integrated mining and processing operation located right on the doorstep of Kalgoorlie.”  The DFS also increases in higher confidence measured and indicated mineral ounces to 2.06 million ounces, representing 67% of global ounces and highlighting the robust nature of the project. Shares have been as much as 5% higher to 7.5 cents and the company's market cap is approximately $124.9 million. Underground and open-pit mining The 10-year LOM will consist of two underground mines, Zoroastrian and Aphrodite, as well as the Excelsior, Zoroastrian, Aphrodite, Bulletin South and Mayday open pits. A mine schedule for the project considers the initial mining of free-milling material from the Zoroastrian North and Bulletin South Open Pit projects, before commencing Excelsior Open Pit and Zoroastrian Underground once the processing plant has been commissioned.  The refractory material from Aphrodite commences in year 4.  This mining schedule shows an average 2.2 million tonnes of ore mined each year, with a peak of 3.5 million tonnes in year 4, when the tail of Excelsior Open Pit and Zoroastrian underground is being mined concurrently with the tail of Aphrodite Stage 1 and commencement of Aphrodite Underground and Aphrodite Stage 2.  Additional satellite pits not discussed within the DFS are available to be included to improve on the existing schedules if required.  3D View of proposed Excelsior and Zoroastrian site layout.  State-of-the-art CIL plant The project will be a standalone mining and processing operation of 2.1 million tonnes per annum throughput via conventional CIL processing circuit incorporating a flotation circuit to produce a gold concentrate. This plant will be designed for construction in two stages - Stage 1 will consist of CIL processing while Stage 2 is an upgrade to include the flotation and dewatering circuits to treat the Aphrodite refractory material to be mined in year 2.  Ryan said: “The construction of a state-of-the-art on-site 2.1 million tonnes per annum capacity CIL plant and flotation circuit located near the site of our Zoroastrian and Excelsior deposits just 40 kilometres north of Kalgoorlie will form the backbone of the Bardoc Gold Project.  “The mill will be fed by a blend of open pit and underground ore feed to produce an average of 136,000 ounces per annum at an impressively low AISC of A$1,188/ounce over an initial 8-year production period - based on the updated 1-million-ounce probable ore reserve.”  Engineering Procurement and Construction (EPC) tenders have now been issued for the construction of the processing plant and infrastructure. FID targeted for Q3 2021 Ryan said: “Based on the project’s very strong financial metrics and Tier-1 location, combined with the strong team we have assembled and our very strong institutional share register, we are confident of securing a highly competitive project funding package over the coming months.  “Importantly, the binding offtake agreement that we secured with leading global minerals trader MRI Trading AG in December ensures we have a dedicated market for the gold concentrate produced, significantly de-risking the project.  “With the impressive financials shown in the DFS, the board has resolved to progress the project to financing.  “We have commenced early engagement with banks around potential debt financing and will be commencing independent technical reviews for the lender process shortly. “Our overall timeline should see us complete financing and announce a final investment decision in Q3 2021, along with early works and procurement of long-lead items and commence full commercial construction in Q4 2021. “That would put us on track to pour first gold in Q4 2022, allowing Bardoc to make the all-important transition to mid-tier gold producer and to become a significant new player in the gold industry in the North Kalgoorlie region.” The company will continue DFS optimisation over the coming months incorporating highly encouraging results generated by recent exploration activities.