Wiluna Mining Corporation Ltd (ASX:WMC, OTC:WMXCF) has made further headway at its namesake WA gold plant as it advances a multi-stage development strategy.
The West Aussie gold miner spent the December quarter targeting growth activities across its portfolio, which represents one of the largest gold districts in Australia under single ownership.
Wiluna’s operations generated A$8.3 million in net cash over the quarter (before treasury and overhead expenses), bringing the total for the year to date to A$19.4 million.
Looking ahead, WMC will continue to advance the Wiltails gold mine towards commissioning, complete a key scoping study and pursue a London Stock Exchange listing.
Wiluna ended the year with A$41.6 million in cash and bullion — more than double the A$18.1 million in the bank at the end of the September quarter.
Wiluna Mining Operation
The Wiluna Mining Operation is currently in development with a staged, three-year program underway to transform Wiluna from a modest, cashflow positive producer of free milling ore via a conventional Carbon-In-Pulp (CIP) plant to a multi-circuit operation producing roughly 200,000 to 250,000 gold ounces per annum.
The staged development plan, on completion, will enable Wiluna to treat all the ore types at Wiluna through four processes including:
- An existing 2.1 million tonne per annum CIP process plant;
- A 750,000 tonne per annum flotation concentrator, which is now complete and was successfully commissioned in December 2021, scaling up to 1.5 million tonne per annum capacity by FY24;
- A gravity circuit that produces gold doré; and
- A tailings retreatment plant that links tailings reclaim and reslurrying with the existing CIP circuit to produce gold doré.
Wiluna’s Stage 1 development is defined at a targeted production profile of 100,000 and 120,000 ounces per annum.
The final size and shape of the Stage 2 development at the Wiluna Mining Operation will depend on the conclusions from a feasibility study currently taking place.
Growth activities
Much of Wiluna’s activity in the December quarter centred on preparing for future operations by advancing development opportunities.
The company made a A$46.7 million net investment during the quarter (compared to the A$41.9 million seeded in the September quarter), and cash primarily went towards mine development and completing Wiluna’s concentrator.
That capital is already paying off: The project’s Stage 1 concentrator was successfully commissioned during the period and is now outperforming nameplate capacity.
With the concentrator in full swing, Wiluna is targeting a full production run rate of 100,000 to 120,000 ounces per annum by end of June 2022.
Development metres (including rehabilitation) for the quarter were 2,739 metres, YTD 5,012 metres.
Wiluna’s underground sulphide development remains on schedule, with 88,731 ore tonnes mined in the financial year to date.
The company had around 139,000 tonnes of sulphide ore stockpiled and ready to process as at December 31, 2021.
In addition, 1,159 wet tonnes of gold concentrate is ready for export with an average concentrate grade of 69 g/t.
Meanwhile, construction work at the Wiltails gold mine is ongoing, with 20% of the scheme now complete ahead of its scheduled commission in May 2022.
According to Wiluna, Wiltails will contribute a material increase in gold production over a long life.
Work on the company’s Stage 2 feasibility study continues, with completion expected by quarter’s end.
Resource development and discovery
Wiluna’s resource base is sitting pretty after the company completed an MRE upgrade during the quarter.
Total mineral resources now stand at 5.53 million ounces at 2.19 g/t gold, including 4.51 million ounces at 3.9 g/t at the Wiluna Mining Centre.
It may not be long before further tonnage is added to the resource.
Wiluna plans to kick off a discovery drilling program this month, comprising 40,000 metres of exploration, targeting high-grade shoots at Wiluna.
Corporate activities
Wiluna enters the new year off the back of a A$53 million capital raise to support future development activities.
Roughly A$5.2 million in proceeds came through last month, meaning it was not included in the December quarter cash and bullion figures.
In terms of other financial news, the company’s Mercuria tranche two debt repayment commencement has been extended for three months and will now kick off in April 2022.
Gold hedging contracts as at December 31, 2021, were for 156,500 ounces at US$1,820 an ounce (equivalent to roughly A$2,509 an ounce), with a negative mark-to-market position of A$5.0 million.