Blue Spec is estimated to increase total production from the Western Australian gold project to 807,000oz over an eight-year mine life


Blue Spec deposit was discovered in 1906. (Credit: Steve Bidmead from Pixabay)

Calidus Resources has announced that it expects to see a 23% increase in the production at the Warrawoona gold project in Western Australia, following the integration of the Blue Spec project.

The company said that a study on the integration of the Blue Spec project into the mine life of its Warrawoona project estimates a significant increase in production for little additional capital expenditure.

Blue Spec is estimated to increase total Warrawoona gold production to 807,000oz over an eight-year mine life versus the 658,000oz contained in the feasibility study.

To acquire 100% of the Blue Spec project, Calidus has revised a deal with Novo Resources, agreeing to make a final cash payment of A$5m ($3.8m) by 31 March 2021 and the issue of 13.3m shares to Novo by 16 April 2021.

Located 70km from Calidus’ 100% owned Warrawoona project, the Blue Spec project is accessible by existing roads.

Under the sale agreement with Novo, Calidus is expected to be granted a licence agreement that will enable access to Novo owned roads and across tenements to facilitate transport of material from Blue Spec to Warrawoona.

Discovered in 1906, the Blue Spec deposit was acquired by Anglo American in 1974.  The mine was closed in 1979 after the original reserve blocks were extracted.

The Blue Spec mine recorded average historical production of more than 25g/t gold with over 60,000oz of gold and 1,500 tonnes of antimony produced from the mine.

Calidus stated: “Calidus proposes that Blue Spec, which is 70km from Warrawoona, would be an underground mine with the ore trucked to Warrawoona for treatment at its planned parallel sulphide circuit, reducing overheads and infrastructure requirements required for Blue Spec while leveraging the infrastructure and personnel based at Warrawoona.

“Trucking the ore from Blue Spec is a practical option given the low-volume, high-grade nature of Blue Spec ore as well as the existing regional road infrastructure.”

In September, Calidus announced the start of early works at the Warrawoona gold project, following the completion of the feasibility study.