Bullabulling gold project can produce 150,000 ounces a year for 19 years, new study reveals

A new study has revealed the huge potential of the Bullabulling gold project south-west of Coolgardie, stating the open-pit operation could produce 150,000 ounces a year for 19 years.

Tim Goyder-chaired Minerals 260 also told the market on Wednesday the project’s mineral resource estimate had increased to 190 million tonnes at one gram per tonne for 6.2 million ounces, with a maiden ore reserve of 90Mt at 0.86g/t for 2.5Moz making it the largest undeveloped gold reserve in Australia not owned by an existing producer.

Minerals 260 said 4.4Moz, or 71 per cent of the MRE, was classified as indicated — a 1.4Moz, or 47 per cent, increase on the previous estimate from December last year.

The company’s prefeasibility study said a five million tonnes per annum plant could churn out the precious metal at an all-in sustaining cost of $2520/oz and generate average annual free cash flow of $330 million.

Minerals 260 said the infrastructure would be designed to support potential expansion to 7.5Mtpa, including additional crushing and materials handling capacity, as well as space allowances for a second ball mill, secondary crusher, and additional leach tanks.

The company said the project had a net present value of $2.3 billion, internal rate of return of 43 per cent, and a two-year payback period.

Minerals 260 said $180m of early works had already started on site 25km south-west of Coolgardie, with the project having a $560m estimate for infrastructure capital and a further $115m for pre-production operations, including mining and commissioning.

The company said a definitive feasibility study was targeted for completion in the first quarter of next year, after which a final investment decision would be considered, with first production targeted for the final quarter of 2028.

Managing director Luke McFadyen said the company had always believed Bullabulling could become a significant gold operation, and the study’s outcomes confirmed the potential for the high-margin, large-scale, long-life project.

“Our target of delivering Bullabulling into production by the end of 2028 will establish Minerals 260 as the next mid-tier gold producer on the ASX,” he said.

He said in the 15 months since Minerals 260 had acquired the project the company had grown the mineral resource from 2.3Moz to 6.2Moz, while significantly increasing resource confidence.

“This growth has been delivered through more than 170,000m of drilling from approximately 1000 holes,” he said.

“Importantly, most of the ounces have been added in the Phoenix-Bacchus deposits, which now contain 4.7Moz and provide a strong foundation for a long-life mining operation,” he said.

Minerals 260 paid Norton Gold Fields — a subsidiary of China’s Zijin Mining — $156.5m in cash plus $10m of scrip in January last year to buy Bullabulling.

Its market capitalisation has since surged from $200m post-acquisition to $1.7b.

The company in February secured $220m in funding from the world’s leading gold royalty company, Franco-Nevada Corporation.