EganStreet Resources Ltd (ASX:EGA) has secured a key approval as it moves towards the start of development at the Rothsay Gold Project in Western Australia’s Mid-West.
The WA Department of Mines, Industry Regulation and Safety (DMIRS) has approved the Rothsay Project Management Plan (PMP).
This is the first of three key government approvals required to allow construction activities and operations to begin.
READ: EganStreet Resources hits bonanza grades of up to 129.2 g/t gold in extensions to Rothsay project
EganStreet managing director Marc Ducler said the PMP approval was a pivotal step in the company’s strategy to become an Australian gold producer.
Shares were up 7% in early trade to 23 cents.
Mining Proposal submitted
The company has also submitted its Mining Proposal to the DMIRS.
Once approval is received, key works will be able to start, including construction of the camp and other key infrastructure such as site offices and power station.
Third permit being prepared
Preparation of documentation for the third permit, the Works Approval and Licence Application, is in its final stages.
This will be submitted shortly to the Department of Water and Environmental Regulation (DWER).
Ducler said, “We are well advanced in project funding discussions and we are continuing our exploration program with the aim of growing our resource, reserve and mine life.”
A recent definitive feasibility study (DFS) found that the project would be a low-cost, high-margin producer capable of delivering strong financial returns for shareholders.
The DFS is based on the production of 250,000 ounces over an initial 6.5-year mine life, with increased average annual production of 53,000 ounces over the first four years.
Forecast life of mine cash costs C1 are $941 per ounce and all-in sustaining costs (AISC) are $1,083/ounce.
First gold from the project is targeted for quarter four of 2019.
Rothsay hosts high-grade mineral resources of 401,000 ounces at an average grade of 8.8 g/t.