Page 31 - gmj141-Oct-Dec-mag-web

Stage 1 expansion plans at Wiluna will see production of
100,000-120,000 ozpa sulphide concentrate and gold dore

To kick-start Stage 2 expansion plans, the company hopes to be drilling
to a depth of 1,200m in the next 12-18 months

“Right now, for Stage 1 in October next year we need the [750,000 support are we going to need? That question is six months away,
tpa] crushing milling circuit to supply the concentrate in the first once we get some more results on the board,” Jerkovic said.
instance.” The company expects to announce a reserve upgrade by the end
Wiluna’s share registry is heavily weighted towards institutions of the year, as construction of the Stage 1 expansion is planned to
(70%) which are championing an aggressive approach to start in January.
exploration and development, while Mercuria Energy Trading Pte “Those two reserve upgrades are to support the mixed range of
Ltd is on board to provide debt for the company’s expansion plans. debt funding to put out in the financial model. The second reserve
“The capital here is not the challenge; it is the plan that is the is about funding Stage 2 and doing a feasibility with the guys we
challenge. We already have a funder in place for Stage 1 and have, or we may do it with someone else,” Jerkovic said.
Stage 2 from a debt perspective. We have a flexible arrangement Four gold systems have been defined on the company’s 1,600sq
with them and can drawdown $21 million and another $40 million km ground holding in the region.
maybe if we need more,” Jerkovic said.
Despite Wiluna being in one of WA’s richest gold belts, the recent
“We just need to take a new financial model once we have the history of companies in the region hasn’t been good.
new reserves and then decide the volume and tenor; it is a simple
And, coupled with some of the disappointments in the State’s gold
prepaid loan. We deliver them gold over four years, and they give
sector in the past two years, Jerkovic is aware of the work ahead
us $40 million and take a fee upfront, there is no magic to it and it is
for his $175 million market capped company.
pretty straightforward.
“We come from that space, but ours is a different story. The biggest
“Even though you don’t have to put hedging in place with those
advantage we have – while we are a sulphide orebody – is that we
facilities, it acts as our risk management to protect cash flow to get
have scale on our side. We actually don’t have to define the scale
through the high expenditure.”
we just have to drill it out,” Jerkovic said.
Underpinning Wiluna’s expansion plans will be an increase to the
“A lot of those orebodies aren’t bad, they have managed to stabilise
resource/reserve base from the current 4.6 moz gold @ 3.65 g/t,
them, but their challenges are resources and reserves; we don’t
with an initial target of adding a further 200,000oz @ 5 g/t.
have that challenge. The other big difference is actually producing
A 50,000m drilling programme “under the headframe” has a concentrate in a large-scale mine which is shallow is not that
delivered for Wiluna and a resource update is imminent. hard; it is simple. Some of those other orebodies, when they go
“We are spending $30 million on drilling at the moment, we will underground, have resources but they have to chase them.
probably get it up to $60 million. The next question will be how Whereas we’re going to have much more shallow volumes to mine
much can we actually fund from our cash flow and how much to meet our requirements.”

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