Bardoc Gold Ltd (ASX:BDC) took big steps in December quarter towards realising the objective of becoming an Australian mid-tier gold producer with the transition to developer status imminent after de-risking the development pathway.
During the quarter, the company signed a binding offtake agreement with MRI Trading AG for gold concentrate from the Bardoc Gold Project, thus supporting project debt financing and marking a pivotal step towards a Final Investment Decision (FID).
The company is on-track to deliver definitive feasibility study (DFS) in late March 2021, paving the way for an FID on a new long-term gold mining and processing operation.
Bardoc also made key senior appointments to strengthen its management team ahead of the start of development and production, with Andrew Francis appointed chief operating officer and Mark Roberts as the project manager.
At the end of the December quarter, the company held healthy cash reserves of A$22.85 million.
Binding offtake agreement
Execution of an offtake agreement with MRI Trading, which covers around 50% of the forecast life-of-mine (LOM) gold production, represents an important step towards establishing the company as a new mid-tier Australian gold producer in the Eastern Goldfields.
Both companies will now move to prepare documentation for a formal agreement in parallel with the project debt financing.
In its quarterly report, Bardoc Gold CEO Robert Ryan said: “A key highlight of the quarter was the announcement in December that we had secured a binding offtake agreement with leading global minerals trader, MRI Trading AG, for the gold concentrate to be produced in the later years of our operations.
“This represents a significant de-risking milestone for the project and provides a solid foundation for our debt funding strategy.
“MRI has an enormous depth of experience in the global mining commodities market – both with customers and financial institutions – and we’re very pleased to have them on board as a committed customer for our future gold concentrate production, which accounts for approximately half of the forecast life-of-mine output from the Bardoc Project.”
Ryan said: “In parallel with these offtake negotiations, we continued to advance the definitive feasibility study, which is on-track for delivery in late March 2021.
“As part of this process, we have also continued to engage with potential lenders regarding project financing, with a view to making a Final Investment Decision in the third quarter of 2021.
“Our hope is that, by the time we head to Diggers & Dealers in Kalgoorlie in August, we will have a fully-funded pathway to production at Bardoc with mining underway and site works beginning at Australia’s newest gold mine.”
High-grade drilling results
Bardoc Gold Project consists of four main deposits and a multitude of smaller projects within its consolidated 247 square kilometre landholding, providing a large resource base and exploration potential.
During the quarter the company received strong results from infill and extensional drilling targeting shallow supergene mineralisation in the Sigma Lode, east of the planned open pit at the cornerstone 1.7-million-ounce Aphrodite Gold Deposit.
Best results include:
- 21 metres at 3.94 g/t gold from 147 metres including 7 metres at 6.12 g/t from 161 metres; and
- 7 metres at 2.77 g/t from 177 metres.
Similarly, encouraging results have come from the cornerstone Zoroastrian Deposit, extending the mineralisation further north outside of the existing 526,000-ounce mineral resource with best results of:
- 11 metres at 4.69 g/t from 237 metres including 6 metres at 6.78 g/t from 239 metres; and
- 34 metres at 2.51 g/t from 81 metres including 12 metres at 4.11 g/t from 100 metres.
BDC also identified multiple zones of strong gold anomalism in first-pass exploration aircore drilling at North Kanowna Star Project, around 29 kilometres southeast of the Bardoc Project, with results including:
- 4 metres at 3.74 g/t from 40 metres; and
- 4 metres at 3.59 g/t from 52 metres.
Ryan said: “Pleasingly, our drilling and exploration programs during the quarter also continued to deliver exceptional results, with assays from the ongoing 40,000 metres drilling program returning outstanding intercepts from the Aphrodite, Zoroastrian and North Kanowna Star deposits.”
During the quarter, Bardoc made two senior appointments to its management team, Andrew Francis, who previously oversaw the PFS study on the project, has been appointed chief operating officer and Mark Roberts, an experienced engineer, as project manager.
Ryan said: “As we prepare to make the imminent transition into production at the Bardoc Project, we were pleased to announce two key senior appointments, with Andrew Francis appointed to the expanded role of chief operating officer and Mark Roberts joining the Bardoc team as project manager.
“Both Andrew and Mark bring considerable skills and experience to their respective roles and have already made a strong contribution to the company.”