The owners of the Kalgoorlie Super Pit have confirmed the mine will continue producing gold for another 15 years, following a strategic review and resource expansion.
The owners of the Kalgoorlie Super Pit have confirmed the mine will continue producing gold for another 15 years, following a strategic review and resource expansion.
Kalgoorlie Consolidated Gold Mines (KCGM), which is a 50:50 joint venture between Saracen Mineral Holdings and Northern Star Resources, said the Pit hosted reserves of 9.7 million ounces of gold, as at June 30.
That represents about a 59 per cent increase on the previous reserve of 6.3Moz, as at December 31, around the time Saracen and Northern Star each purchased a 50 per cent-stake in the Pit.
KCGM said the "long-life asset" had a growing production profile and significant exploration upside.
It has estimated the Pit would produce between 440,000oz and 480,000oz in the current financial year at an all-in sustaining cost (AISC) of $1,470-1,570/oz.
Production is expected to rise to 500,000oz from FY24, KCGM said, followed by a steady climb to 675,000oz from FY28.
KCGM attributed the growth to drilling results that sat outside the Pit’s current reserves including at the Fimiston South open pit, which hosts a maiden reserve of 3.9Moz of gold.
The mine owners said a transformation of open pit operations was now underway, with four mining areas including Fimiston South scheduled for the second half of next year.
Both Saracen and Northern Star have separately announced an increase in the companies' overall reserves to 8.6Moz and 10.8Moz respectively.
Saracen has forecast production for FY21 to be 600,000-640,000oz at an AISC of $1,300-1,400/oz.
That includes from its Carosue Dam and Thunderbox operations in WA, which host 3.7Moz.
Managing director Raleigh Finlayson said Saracen had an 8-year track record of meeting or beating its production guidance.
“As in the past, our next round of substantial growth will come totally from within Western Australia, ensuring our future-proofing strategy continues to benefit from the certainty which comes from operating solely in a tier-1 location,” he said.
“We are in a superb position given the strong gold price, our growing production profile, our outstanding relationship with Northern Star at the world-class KCGM project, and 17Moz of resources in WA.”
Meanwhile, Northern Star Resources said its reserves had doubled, with the company anticipating production of between 940,000oz and 1.06Moz in FY21.
Northern Star expects production to rise to 1.15Moz the following financial year and to 1.3Moz by FY27.
Chairman Bill Beament said the KCGM reserves increase highlighted the Pit’s world-class status.
“The review shows that the outlook for KCGM is excellent on every level,” he said. “The project is set to generate strong production growth underpinned by an extensive inventory in a tier-1 location.”
Mr Beament said the Pit would play a key role in driving Northern Star’s annual production rate.
Its shares closed up 5 per cent to trade at $14.99, and Saracen's up 2.3 per cent to trade at $5.75.
