Breaker Resources (ASX: BRB) has reported ‘compelling’ results from an open pit optimisation study targeting the the Bombora-Claypan gold deposits at is Lake Roe Gold Project in WA.
The study has resulted in a number of configurations including a 265m-deep pit shell that would capture around 764,000oz of the 893,000oz near-surface resource component, with a 215m-deep version capturing around 427,000oz and resulting in an estimated pre-tax free cashflow of approximately $385 million over 4 years, excluding capital plant and infrastructure costs.
Table displaying scenarios from progressively deeper staged open pit scenariosAddressing the news, Breaker Resources Managing Director Tom Sanders said: “The study highlights the enormous value to be unlocked at Lake Roe. The outstanding potential free cashflow generation is a game-changer for Breaker and opens up a range of development and processing options.
It also shows the huge upside for Breaker shareholders considering the Company’s current market capitalisation, especially when the value of its free-carried lithum interests are considered.
“The outstanding potential free cashflow generation is a game-changer for Breaker and opens up a range of development and processing options”
We now have a solid foundation for a long-term standalone mining project with scope for attractive margins at current gold prices and with potential for material enhancement from underground mining.”
The company notes that a staged operation would be viable, with ‘strong’ surpluses from early-stage mining being used to fund deeper stages.
This may include a 65-deep started pit across 1km of strike on the northern end of Bombora, which could potentially capture 95,000oz of gold and generate approximately $166 million in just one year, excluding capital plant and infrastructure costs.
Lake Roe map displaying open pit shells #41 @ 215m depth (magenta) and #74 @ 265m depth (green)In addition, Breaker has begun work on underground studies targeting a subset of the project’s underground mineral resource totalling ~501,000oz.
The company reports that it is advancing permitting and other key work streams required for development, while planning for expanded drilling to support ongoing growth.
Images: Breaker Resources NL
