Meeka Metals Advances Towards First Gold Production at Murchison Project
Meeka Metals has secured critical mine dewatering and clearing permits for its fully-owned Murchison project in Western Australia's Mid West region. With mining permits expected early in September, the company moves closer to initiating gold production.
The management has drawn down $1.34 million from a $2.2 million secured bridging loan to purchase the necessary camp and infrastructure. This includes a 116-person camp, a 200-person change house, an ablutions block at the Andy Well mining center, an administration complex, a mining office for the Turnberry mining center, and a 110,000-litre fuel storage tank. These facilities support a resource of 1.2 million ounces grading 3 grams per tonne gold and a reserve of 305,000 ounces running at 3.8g/t.
Tim Davidson, Managing Director of Meeka Metals, emphasized the significance of these approvals, stating, "Receiving these approvals is a significant milestone. With just one permit pending, we're on the verge of transitioning from being development-ready to full project execution."
The current phase of the project, funded by the secured loan, includes the installation of site services, paving the way for major infrastructure development slated to begin next month. The definitive feasibility study (DFS) completed in May concluded that the project will have a nine-year mine life, producing 64,000 ounces of gold annually with a cut-off grade of 3.7g/t. The current high Australian gold price, above $3,530, significantly shortens the payback period to eight months, compared to the 22 months estimated in July last year.
The project focuses on recommissioning the Andy Well carbon-in-leach processing plant, which boasts a 97.5% average metallurgical recovery rate. The plant is expected to process 3.4 million tonnes of ore over its nine-year life, with an average feed grade of 3.7g/t gold.
Capital costs for the project are estimated at $44 million, with $10 million allocated for site infrastructure and camp facilities, $21 million for recommissioning the Andy Well plant, $7 million for open-pit mining, $4 million for capitalized operating costs, and $3 million reserved for contingencies.
The Andy Well deposit, previously owned by Silver Lake Resources, saw its first mining activity in September 2012, with the inaugural gold pour in February 2013. However, the project was placed in care and maintenance in September 2017 due to a decline in gold prices. Meeka acquired both the Andy Well and adjacent Gnaweeda gold projects, including the Turnberry and St Anne deposits, in February 2021.
The Murchison region, known for its rich history of multi-million-ounce gold discoveries since 1892, is poised for renewed activity. As the last mining permits are anticipated in early September and a $40 million debt facility for capital expenditure is expected to be signed later this month, Meeka Metals is on track to commence first mining in January next year.
