Gold Duke Project Boasts 617% IRR and Binding Milling Deal Signed
Western Gold Resources has signed a binding toll milling agreement with Wiluna Mining Corporation, fast-tracking the Gold Duke Project towards near-term production amid record gold prices.
- Binding toll milling agreement signed with Wiluna Mining Corporation
- Gold Duke Project holds 3.25Mt at 2.1g/t Au for 214,000 oz resource
- Updated scoping study shows 617% IRR at A$3,500 gold, improved by current prices
- Preferred mining contractor selected with deferred payment facility
- Brownfields exploration underway to extend mine life and production profile
A Strategic Leap Forward
Western Gold Resources (ASX, WGR) has taken a decisive step to accelerate its Gold Duke Project in Western Australia’s prolific Goldfields region. The company executed a binding toll milling agreement with Wiluna Mining Corporation, whose processing plant lies just 46 kilometres from the Gold Duke site. This proximity, combined with an existing haulage route, positions WGR to fast-track production with minimal capital outlay.
The agreement, effective from mid-June 2025, spans 24 months and leverages Wiluna’s fully operational processing facilities. Metallurgical testing confirms the Gold Duke ore is well-suited to conventional crush, grind, and Carbon-in-Leach (CIL) processing, boasting gold recoveries exceeding 93% within 48 hours. These results underpin confidence in the project's near-term viability.
Robust Economics Backed by Strong Resources
The Gold Duke Project’s updated mineral resource estimate stands at 3.25 million tonnes grading 2.1 grams per tonne gold, equating to approximately 214,000 ounces. An earlier scoping study highlighted an impressive internal rate of return (IRR) of 617% at a conservative gold price of A$3,500 per ounce. With current gold prices surpassing A$5,100, the project’s economics are poised to improve further, potentially delivering substantial cash flow to fund growth initiatives.
Stage 1 of the project, fully approved for mining, targets four open pits; Eagle, Emu, Gold King, and Golden Monarch; with a production target of 447,000 tonnes at 2.55 g/t for 34,000 ounces. The company’s strategy to leverage existing approvals and infrastructure aims to shorten the timeline to production, a critical advantage in today’s bullish gold market.
Operational Partnerships and Growth Prospects
Complementing the milling agreement, Western Gold Resources has selected SSH Group Limited as its preferred mining contractor. SSH Group’s proposed deferred payment facility is designed to support WGR’s cash flow during the initial operational phase, offering a turnkey solution encompassing site establishment, mining, and ore haulage.
Beyond Stage 1, WGR is actively reviewing brownfields exploration targets within the Gold Duke tenement package. Prospects such as Joyners Find, Bottom Camp, and the Gold King/Golden Monarch saddle present promising opportunities to extend mine life and enhance production profiles. These targets lie within approved disturbance areas, potentially streamlining future development.
Positioned for a Bullish Gold Environment
With approvals in place, a binding milling agreement secured, and a preferred mining contractor ready, Western Gold Resources is well-positioned to capitalize on record-high gold prices. The project’s modest capital requirements and short timeframe to production offer a compelling pathway to generate cash flow and fund further growth. Investors will be watching closely as the company moves towards its Final Investment Decision and operational commencement.
Bottom Line?
Western Gold Resources is poised to transform its Gold Duke Project from development to production, with market conditions and strategic partnerships aligning for success.
Questions in the middle?
- When will the Western Gold Resources Board make the Final Investment Decision?
- How will ongoing exploration impact the project’s mine life and production scale?
- What are the risks associated with reliance on third-party milling and contractor arrangements?
