Agate Creek Ore Reserve Totals 460,000 Tonnes at 2.5 g/t Gold, Containing 36,800 Oz

A Significant Milestone for Agate Creek

Savannah Goldfields Ltd (ASX, SVG) has taken a major step forward with the announcement of the maiden Ore Reserve at its wholly owned Agate Creek Gold Project in Far North Queensland. The reserve totals 460,000 tonnes grading 2.5 grams per tonne gold, containing approximately 36,800 ounces of gold. This reserve underpins the company’s strategy to resume gold production after a period of operational suspension.

Operational and Economic Context

The Ore Reserve is designed around open pit mining with mined material trucked to Savannah’s Georgetown Gold Processing Plant (GGPP), located about 100 kilometres north. The processing plant, acquired and refurbished by Savannah in 2022, has a proven track record of treating Agate Creek ore, producing gold doré bars with a conservative metallurgical recovery of 92% applied in the reserve calculations.

Importantly, the Ore Reserve has been prepared to the rigorous JORC 2012 reporting standards, incorporating detailed mining and processing cost models updated for inflation and current contract rates. The company used a gold price of AUD 3,750 per ounce for economic modelling, a conservative figure given the current spot price exceeds AUD 5,000 per ounce, which bodes well for project economics.

Cost Structure and Capital Requirements

Mining costs have been carefully modelled based on recent operational experience, including allowances for wet season delays and challenging topography. Total mining costs are estimated at approximately AUD 5.92 per tonne, while processing costs, including haulage to the GGPP, are forecast at AUD 138.90 per ore tonne. Capital expenditure to restart operations is modest, estimated at under AUD 1 million, covering minor plant repairs, road upgrades, and initial reagent purchases.

These cost assumptions, combined with the Ore Reserve grade and recovery, suggest a positive cash flow profile with a payback period on capital and operating spend estimated at 18 months at the modelling gold price, and potentially as short as four months at current market prices.

Environmental and Regulatory Position

The Agate Creek Project operates on Mining Lease ML 100030, granted in 2019, with all necessary environmental and native title approvals either in place or progressing through minor amendments to accommodate the latest pit designs. Savannah has existing native title agreements and conducts ongoing environmental monitoring to manage noise, dust, and other impacts. The company anticipates no material hurdles in securing final approvals to recommence mining activities.

Strategic Implications and Next Steps

CEO Brad Sampson highlighted the importance of this Ore Reserve announcement as a foundation for non-dilutive financing initiatives to support working capital needs and production restart. The reserve classification reflects extensive derisking from previous mining and processing campaigns, providing confidence to investors and stakeholders. Moving forward, Savannah will focus on finalising environmental authority amendments, securing financing, and preparing for operational ramp-up.