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Dreadnought Resources (ASX:DRE) is heading towards production at its Star of Mangaroon deposit in Western Australia after today publishing a scoping study for initial mining from its open pit.
Around 20,000 ounces are to be produced for an operating cash flow of approximately $40.1 million at an AISC (all-in-sustaining cost) of $1,800 per ounce.
The news comes only two months after Dreadnought first published a maiden mineral resource estimate at the deposit; this was set at 23,300 ounces at 12.8 grams per tonne (g/t) within the indicated category.
According to the company’s November 27 update, mineralisation at Star of Mangaroon is both of a shallow and high-grade nature.
Managing director Dean Tuck today said the recent news indicated how this mineralisation could be exploited and used to build Dreadnought’s profile.
“The initial scoping study for Star of Mangaroon highlights the opportunity that the high grade, near-surface mineralisation at the Star of Mangaroon presents and forms the foundation of our strategy to become a self-funded explorer,” he said.
“With the scoping study delivered, Dreadnought will seek to advance discussions with third parties to outsource funding, development, haulage, and processing to generate cash flow.
“The cash flow from this operation would present a major milestone for Dreadnought and our shareholders as the proceeds could be used to fund future exploration and potentially return capital to our shareholders.”
He added the scoping study’s results had justified completion of the required baseline studies to progress approvals ahead of potential open pit mining, pointing out that the time was right in terms of gold prices, which have been climbing, and are now at US$2740 per ounce.
Dreadnought shares have been trading flat at 1.1 cents.
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