The results of the preliminary production schedule and cash flow forecast for the Bullabulling Gold project have strongly supported the financial viability of the asset.
It is now a case of full steam ahead on the pre-feasibility study for Bullabulling Gold (LON:BGL) as the preliminary production schedule for the project at Coolgardie in Western Australia points to the recovery of 1.95mln ounces of gold.
The production schedule covers a period of just over 10 years.
Life of mine cash costs are projected to average out at A$1,104 (US$1149.70) per ounce. As of the morning of December 3, the spot price of gold was over US$1700 an ounce.
Better news still for Bullabulling, is the forecast of materially lower cash costs in the early years of the mine.
As previously indicated, the company expects 650,000 ounces to be produced in the first three years of production at a cost of only A$884 per ounce, with costs in the first five years of the life of the mine seen averaging out at A$971 per ounce.
At the current gold price and exchange rate, pre-production capital expenditure would be recovered in little more than two years with a full eight years of subsequent production remaining, the Aussie miner noted.
The preliminary schedule does not include any production from the east-west to northwest-southeast striking Gibraltar trend, which is still being explored.
The Gibraltar deposit hosts an indicated resource of 4.8 million tonnes at 1.15 grams per tonne (g/t) for 177,500 ounces of contained gold.
Mining of Gibraltar is currently being evaluated and could be used to supplement Bullabulling production.
"The pre-feasibility study results reinforce the company's view that the Bullabulling deposit can support a financially robust gold mine of substantial scale. Specific opportunities already identified to further enhance the project and the identified potential for resource growth provide additional encouragement," said Brett Lambert, managing director of Bullabulling Gold.
Shares in Bullabulling were trading 2.73% higher on the day on AIM shortly before noon.
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