Calidus Resources Ramps Up Gold Production at Warrawoona, Maintains Guidance

Calidus Resources Ltd (ASX: CAI) is demonstrating strong progress at its Warrawoona Gold Project in Western Australia.

The company produced 15,118 ounces of gold in the March quarter, a significant increase from the December quarter (11,980 ounces).

Notably, March itself saw the highest monthly production (5,845 ounces) since operations began, driven by renewed access to the main Klondyke orebody.

This impressive performance allows Calidus to maintain its production guidance for the second half of FY2024 at 32,000 to 37,000 ounces.

Key Drivers of Increased Production

Resumed access to the Klondyke orebody following the completion of a cutback.

The commencement of Blue Bar ore treatment is expected to significantly boost production in the June quarter.

Financial Strength and Future Plans

Calidus’ investment in developing Warrawoona is paying off, with current production at 60,000 to 70,000 ounces per annum.

The company’s production profile is expected to reach 120,000 ounces per annum within three years, with the inclusion of high-grade satellite deposits and a competitive AISC of around A$2,000 per ounce.

Improved cash flow generation will allow Calidus to explore the potential of its other high-grade deposits.

At 31 March 2024, Calidus held $12.2 million of cash and cash equivalents following debt repayments of $8 million during the quarter.

Strategic Hedge Restructuring

Calidus has successfully restructured its hedge and debt arrangements with Macquarie, unlocking an additional A$31 million in free cash flow for 2024. This restructuring reduces the CY24 hedge volume and debt repayments, while still providing some protection with the remaining hedge position.

The CY24 hedge volume was reduced by 21,250 ounces, delivering a A$20 million benefit to Calidus at a spot gold price of A$3,300 an ounce, and reduced debt repayments totalling A$11 million for the period.

The hedge position was reduced by 5,250 ounces during the quarter, with 78,000 ounces remaining at A$2,370 an ounce.

Looking Ahead

Calidus Resources is well-positioned for continued growth at Warrawoona, with a strong production ramp-up underway, a clear path to increased output, and a strategic financial strategy.

Investors can expect Calidus to become a significant player in the Pilbara gold region.

Articles of Interest