Meeka Metals has invested in a total camp and infrastructure package to accelerate the development of its flagship Murchison gold project in Western Australia – and at just 20 per cent of the cost predicted in its recent definitive feasibility study (DFS).
The shopping cart includes buildings to house 116 people in an onsite camp, a 200-person change house, an ablution block and a fully fitted-out main office building for the Andy Well mining centre, in addition to a mining office for an open pit Turnberry mining centre and a110-kilolitre fuel storage tank. Planning is now in place to relocate the infrastructure 100km from Sandfire Resources’ De Grussa mine next month.
Management sees the purchases as a big step towards realising its DFS for the Murchison project.
Meeka has taken out a $2.2 million bridging facility to cover the purchases and the relocation and installation of the infrastructure. It is now targeting full credit approval for a bigger project development facility.
The parties listed in the secured bridging facility comprise a group of eight lenders, including two directors of the company whose contributions account for about a third of the facility. Management says the terms for the facility are the same as conventional market terms and are no more favourable to the directors than to the other lenders.
Meeka Metals managing director Tim Davidson said: “We have secured high-quality infrastructure, immediately available for installation at our Murchison Gold Project, at a fraction of replacement value. This allows us to accelerate development.”
The company’s recently-released DFS outlined its pathway to gold production, with plans to mine 400,000 ounces during an initial nine-year mine life at its Murchison project. The operation, near the town of Meekatharra in Western Australia’s Murchison region, hosts a mineral resource of 1.2 million ounces at 3 grams per tonne gold, with an ore reserve of 2.5 million tonnes at 3.8g/t for 305,000 ounces.
The project area stretches for a whopping 281 square kilometres and includes the Turnberry, Andy Well and St Anne’s deposits. Turnberry holds a 685,000-ounce gold resource going 2g/t and lies only 12km south of the St Anne’s 25,000-ounce gold mineral resource, while Andy Well contains a notable gold grade of 8.6g/t for its 505,000 ounces.
The DFS outlined detailed project economics based on a conservative gold price of $3250 per ounce, in addition to figures using a potential gold price at $3500 per ounce – which is closer to, but still below the current rate of about $3521 an ounce. The study outlines a predicted peak mine production of 64,000 gold ounces in the fourth year, with gold sales expected to reach a maximum of 55,000 ounces in year six.
In addition to its impressive financial outlook based on a comprehensive DFS, management believes the Murchison project also holds strong potential to extend into the underground, highlighting another possible string to its bow. That view appears to have been confirmed from previous deeper scout drilling where intersections below the planned pit include high-grade lode up to 62.8g/t gold from 366m.
Meeka also owns the Circle Valley project in the Albany-Fraser Mobile Belt, which is home to the outstanding Tropicana gold mine with 3 million ounces of gold in past production. Gold mineralisation has been identified in four separate locations at Circle Valley and Meeka is excited about its potential.
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By Steve Butler
