Wiluna Mining Corporation Ltd (ASX:WMC, OTC:WMXCF) has bolstered its ore reserves for the eponymous Wiluna Mining Centre to 36.8 million tonnes at 1.2 g/t gold for 1.42 million ounces.
The WA mining hub’s underground reserve has seen major growth, with tonnage and ore reserves jumping by 51% and 31% respectively to 6.52 million ounces at 4.11 g/t for 861,900 gold ounces.
Wiluna also reported its Wiltails ore reserve decreased slightly by 43,300 ounces because its tailing dam construction impacted a portion of the tailings ore reserve.
Ultimately, however, the boosted underground reserve supports Wiluna’s medium- to long-term plans to grow its gold production with an emphasis on the high-grade underground areas.
Feasibility study progress
As it considers its next moves, Wiluna is pushing ahead with feasibility studies for its namesake mining centre.
The gold stock reported its stage one metrics remain positive, with key figures including:
- A production target between 110,000 and 125,000 gold ounces per annum;
- An all-in sustaining cost of A$1,796 an ounce(after payable charge of roughly A$400 an ounce);
- A net present value of $343 Million; and
- A 305% internal rate of return.
Further stage one metrics are outlined below:
Because of rapidly escalating input costs, tight labour conditions and incomplete feasibility outcomes, Wiluna’s board has decided to pause further expansion and focus on optimising stage one and its project cashflows until conditions improve.
“The company has made the prudent decision to continue to work on these studies and delay the stage two expansion at this time,” Wiluna stated in a market announcement on Tuesday.
“We believe more is required for the stage two studies to be considered definitive, especially with additional resource and reserve development drilling required, particularly at the southern end of the Wiluna Mining Centre.”
Wiluna says this decision will give it more time to drill out of the WMC, which contains a high-grade mineral inventory of 3.11 million ounces at 5.81 g/t (above a 3.5g/t cut-off grade).
Next steps
Moving forward, Wiluna will concentrate on bringing stage one up to commercial production and optimising the operation.
It’s expected stage one will be fully ramped up by the end of 2022, with steady-state production estimated initially between 110,000-125,000 ounces per annum.
Down the line, with further minor, lower-cost modifications, stage one could increase incrementally to produce around 150,000 gold ounces per annum.
Wiluna will provide more detail on its stage one and two plans as they become available.
Keeping up momentum
Describing today’s update, Wiluna mining executive chair Milan Jerkovic said: “The ore reserve increase for Wiluna is the result of focused efforts of our geological and mining teams over the past 12 months to grow our resources and reserves.
“Despite the open pit ore reserves at Wiluna reducing with the current focus around underground operations, we continue to investigate ways to bring this abundant, broad mineralisation back to a reserve status in the coming years.
“Confirmation of the significant Wiltails reserves after the completion of detailed tailings mining design for the project further verifies the intrinsic value of the project, which will be commissioned in the final quarter of FY22.
“The potential for extensions to known mineral resources at Wiluna remains considerable, so we will continue to maintain the momentum we have built to methodically infill drill the significant gaps between defined lodes.
“Regarding our ongoing feasibility studies, … we believe that pushing ahead with a large scale, capital challenging expansion in this current economic and social environment is not in the best interest of our shareholders …
“For this reason, we will pause and optimise stage one, which we believe has considerable stand-alone potential, and seek to continue our drilling and studies to 'right-size' the Wiluna Mining Operation."