WA Gold’s Abercromby Study Projects A$270m Cashflow on A$8m Capex

Abercromby Project Delivers Strong Financial Metrics

WA Gold Limited (ASX:WAU) has unveiled a scoping study for its Abercromby Gold Project in Western Australia that paints a compelling picture. The Stage 1 mine scenario forecasts a total net cashflow between A$243 million and A$297 million pre-tax, underpinned by a modest A$8 million pre-production capital investment. The study estimates a net present value (NPV7) ranging from A$205 million to A$253 million and an internal rate of return (IRR) of up to 526% pre-tax, highlighting the project’s potential to generate substantial returns on a relatively small upfront outlay.

The initial production target is approximately 114,000 ounces of gold, with around 90% of that classified as Indicated Resources under the JORC Code, lending a higher degree of geological confidence. The project benefits from free-milling gold amenable to conventional carbon-in-leach processing, with metallurgical recoveries confirmed at 94%, supporting efficient gold extraction.

Staged Mining Strategy Optimises Capital and Cashflow

The scoping study proposes a staged mining approach commencing with a small open pit operation transitioning to underground mining after about 16 months. The open pit phase is designed primarily to establish underground access rather than maximise early cashflow, with the underground operation accounting for the bulk of production and cash generation.

Operating costs are competitive, with all-in sustaining costs (AISC) estimated at A$4,204 per ounce for the open pit and A$2,938 per ounce for underground mining. The payback period for the initial capital investment is projected at a swift 1.5 years, underscoring the project’s economic attractiveness.

Drilling Program Targets Resource Expansion

WA Gold is actively pursuing resource growth with a 10,000-metre resource development drilling program underway at Abercromby, having completed 2,200 metres to date. This program aims to test extensions of the existing 518,000-ounce Mineral Resource, which remains open at depth and along strike, particularly focusing on the Capital Deposit. Early drilling results have identified high-grade gold intercepts, including 3 metres at 14.38 g/t Au and 3 metres at 4.97 g/t Au, suggesting potential for significant resource expansion.

Drilling is targeting continuity of high-grade lodes and structural controls that could enhance the size and grade of the deposit. This aggressive exploration strategy could materially improve the project’s economics and underpin future feasibility studies.

Toll Treatment and Low Environmental Impact

To minimise capital intensity, the project plans to utilise toll treatment at an existing carbon-in-leach processing facility located within 20 to 70 kilometres of Abercromby. WA Gold has executed a memorandum of understanding with Wiluna Mining to assess processing at the Matilda CIL plant, which could accelerate the pathway to production while reducing upfront infrastructure costs.

Notably, the project does not require on-site tailings storage facilities, which is expected to limit environmental impacts and streamline approvals.

Corporate Moves and Strong Cash Position

WA Gold recently completed a $2.5 million placement at $0.021 per share, supported by cornerstone investors including Tribeca Investment Partners and European strategic investors. This capital injection bolsters the company’s balance sheet as it advances Abercromby towards a final investment decision targeted for late 2027.

Management changes include the appointment of Ben Pollard as CEO, bringing 30 years of WA gold sector experience, and Gareth McArthur as General Manager, Project Development. The company also rebranded from BMG Resources Limited to WA Gold Limited, adopting the ticker WAU, reflecting its renewed focus on gold development.

Financially, the company ended the March quarter with cash and equivalents of A$4.8 million and an estimated 13 quarters of funding available based on current expenditure levels, providing a solid runway for ongoing exploration and development activities.

WA Gold’s scoping study builds on earlier announcements and confirms the project’s low capital intensity and strong leverage to gold price upside. The company’s approach to combining a staged mining plan with toll treatment options and aggressive drilling is designed to maximise value while managing risk.

This progress is detailed in the company’s recent low-cost path to 114,000oz announcement, which outlined similar financial metrics and operational strategies.