Catalyst Metals’ Trident Gold Streak May Lower Capital Costs and Development Risks

Catalyst Metals Ltd (ASX: CYL) produces around 110,000 gold ounces a year, with recent exploration success providing potential to increase.

Current all-in-sustaining costs are A$2,436 an ounce, providing a healthy margin with the current gold price around A$3500 an ounce.

The average realised price is A$3,017, which is expected to average up as more sales are made in the current buoyant market.

At the Trident project, the latest shallow drilling intersected 38 metres at 2.9 g/t gold.

Other significant results from the 44 hole program include:

  • 35 metres at 7.6 g/t gold, 8.8 metre true width;
  • 18 metres at 5.0 g/t gold, 3.9 metre true width; and
  • 43 meters at 2.9 g.t gold, 38.3 metre true width.

The results suggest mineralisation is shallow and above the existing Trident deposit hosting 508,000 ounces at 3.7 g/t gold.

The indicated portion is 257,000 ounces at 5.0 g/t gold.

Catalyst will now assess the potential for a small open pit that would also provide a portal position for the Trident underground mine.

If the assessment is positive, this could allow an alternate approach that could lower upfront capex and overall development risk.

Lifting production

Catalyst is of the view that annual gold production could potentially be increased to 200,000 ounces.

Trident is one of the many potential sources to achieve this processing ore through the underutilised Plutonic processing plant.

New approach

James Champion de Crespigny, managing director, commented:

“We are pleased that these latest drilling results have opened up a new approach for Catalyst to assess in the development of the Trident Deposit, with the potential to reduce both cost and risk.

“The Plutonic Gold Mine is performing well and our new operating team has stabilised operations.

“Strong cash generation has provided Catalyst the opportunity to invest in a drilling program to assess alternative ways to optimise the Trident development.”

Trident’s development remains a key component of the company’s future growth strategy.

More results are pending.

History

In the last three years, through acquisitions, Catalyst has matured from explorer to substantial gold producer with an attractive organic growth pipeline.

In the quest for production growth, the company has recently proved this can be achieved.

In the last nine months, Catalyst has turned around two operating gold mines – Plutonic and Henty – lifting comparative production to 110,000 ounces from 70,000 ounces per annum, while costs fell.

If production increases and costs reduces, as scale is built, then this will provide a dual-economic benefit.

Catalyst is capped around $180 million, and has $16 million in cash and debt of $21 million.

 

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