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“ Investors, particularly the big institutional investors, realise this is the last

opportunity they have to get involved.

“Investors, particularly the big institutional investors, realise this Reeves said Calidus was intent on making sure Warrawoona
is the last opportunity they have to get involved,” Reeves said. lived up to expectations.
Despite the 150% increase in value in 2020, Reeves is adamant “When you deliver a project like this properly, it is going to be
the best is yet to come from a market perspective. hugely value-accretive to shareholders, so you need to ensure
“When you are building a project trading is always low because you do deliver it properly,” he said. “In the capital raising we are
everyone knows you are going to have to raise money,” he said. raising more than required to provide that buffer for development.
“Now that funding is secured, I expect the brakes to be let off On the processing side – the plant is being built by GR
the share price.” Engineering Services Ltd – the company is preparing for a
Project finance for Warrawoona is highly leveraged towards small, high-grade, refractory component by building a flotation
debt, a deliberate strategy according to Reeves.
“With the low share price, being highly
leveraged was always the best outcome for
shareholders,” he said.
The company is confident the project itself
can manage such debt levels thanks to a
combination of physical characteristics,
execution experience and the structure of the
financing.
“The project has to be able to support the debt
and this project does,” Reeves said. “There is
outcropping, no pre-strip and we are straight
into ore. Payback is just over 12 months. That
geometry means we can afford to put the debt
in place to de-risk the project.”
The Macquarie facility includes a hedge book
of 105,000oz over the 3.25-year term facility.
Calidus has high levels of confidence in the reserves at Warrawoona, having
Reeves said the hedge came at the insistence
drilled the Klondyke deposit on 12.5m by 12.5m spacing
of the company.
“It is an essential treasury management tool,”
plant to run in parallel with the CIL circuit.
he said. “It is less than 20% of the reserves and at these gold
prices to be able to lock in that sort of cash margin is absolutely “That gives us flexibility to look at other high-grade deposits in
sensational.” the area,” Reeves said.
Reeves acknowledged the gold price environment had Despite having an 8.7-year mine life to play with, Warrawoona’s
smoothed the path to financing but said Calidus’ recent longer-term options are already in Reeves’ sights.
achievements and its team’s strong track-record were just as Calidus has only tested two of six main trends at Warrawoona
important in securing project finance. and even the main Klondyke deposit remains open along strike
“All the management and board have developed mines before and at depth.
and that is one of the main reasons why we have ticked all those The company has also acquired the Blue Spec project –
boxes.” a 219,000oz @ 16.3 g/t gold deposit 60km south-east of
Financiers have become wary of single-asset gold companies Warrawoona.
after a litany of failures in the last two years but Reeves “The idea is to get Blue Spec in as a satellite mining operation,
said Calidus’ experience in project construction meant it establish the satellite infrastructure and then find more like it,”
had addressed common soft spots early in Warrawoona’s Reeve said. “Sixteen grams orebodies don’t come along very
development, including drilling out the first year of reserves on often and Blue Spec will change the production, cost and cash
12.5m by 12.5m spacing. margin profiles of Warrawoona.”
“We will continue to do that and are currently doing another Reeves said a scoping study on Blue Spec would be completed
round of infill drilling to keep de-risking it. We have one year this quarter with a DFS to follow in the second half of the year.
of mining already and we will tighten it again, to 6m by 12.5m
“I don’t think the market fully appreciates yet exactly what Blue
before mining starts.”
Spec is,” Reeves said.

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