Bardoc Gold Ltd (ASX:BDC)’s strategic review of the development strategy for its 3.07-million-ounce Bardoc Gold Project will canvas “strategic M&A and consolidation opportunities” as the company seeks to unlock shareholder value.
As covered by Proactive, Bardoc has initiated a strategic review of the project in light of a rapidly escalating cost environment, the tightening WA labour market and COVID-19 related supply challenges.
The company also outlined the strong progress it made at the project in the 2021 financial year, which included an updated measured, indicated and inferred mineral resource estimate and an extremely encouraging definitive feasibility study.
Unlocking shareholder value
Bardoc chairman Tony Leibowitz said the company saw “enormous potential” to grow the existing resource at Bardoc in the short and long-term future.
“The past year has seen us take further vital steps with the ongoing development at our flagship 3.07-million-ounce project, located just north of Kalgoorlie.
“We have continued to build on the strong foundations put in place over the past few years and implemented measures to ensure a highly robust project capable of delivering strong shareholder returns for many years to come.
“Indications received from key suppliers and contractors are that cost pressures for new resources projects are likely to continue to worsen over the next 12-18 months.
“In light of these factors, we have decided that it is in the best interests of shareholders to defer the final investment decision originally targeted for the end of 2021 and commence a strategic review to identify alternative pathways to unlock the significant value within the company.
“This review is likely to include consideration of strategic M&A and consolidation opportunities, as well as other pathways to monetise the deposit in the near term.
“The decision to undertake this strategic review is a necessary and pragmatic decision which we firmly believe will ultimately deliver positive outcomes for our shareholders.
“We have a unique and highly valuable asset in the Bardoc gold project with a resource of over 3 million ounces, 1 million ounces ore reserve, a premium location on the doorstep of Kalgoorlie and exceptional exploration upside which remains to be unlocked.”
FY21 progress
Bardoc made significant progress throughout the financial year, highlighted by an increase in the higher confidence measured and indicated mineral resource categories to 2.06 million ounces through infill drilling across cornerstone deposits and satellite deposits, representing 67% of the total 3.07-million-ounce resource.
It also delivered a definitive feasibility study confirming the potential for a significant new long-life, mid-tier Australian gold project, with key outcomes including:
- 28% increase in open pit and underground probable ore reserve to 15.9 million tonnes at 2.0 g/t for 1 million ounces (at A$2,000/ounce), representing 88% of life-of-mine production;
- Average annual gold sales of 135,760 ounces over 8.2-years mill production;
- Life-of-mine pre-tax cash-flow of A$740 million at A$2,250/ounce gold price;
- Pre-tax net present value of A$479 million and 41% internal rate of return;
- Peak annual gold production of 140,000 ounces for six years;
- Pre-production capital of A$177 million with 32-month payback from production start; and
- Life-of-mine all-in sustaining costs of A$1,188/ounce.
Bardoc also secured a binding life-of-mine offtake agreement with leading global minerals trader, MRI Trading AG, completed its inaugural sustainability report and increased the measured, indicated and inferred mineral resource estimate.
In mid-September, it also received further high-grade drilling results highlighting the scope for gold inventory growth at Zoroastrian deposit.
The latest exploration drilling revealed that the mineralisation extends for more than 150 metres below the existing resource at Blueys South and Zoroastrian South lodes.
- Daniel Paproth