White Rock Minerals refocuses on its Australian Mt Carrington gold and silver asset as its Alaskan zinc project takes shape
Strong progress towards development of the Red Mountain zinc and precious metals project in Alaska following a joint venture with Sandfire Resources is allowing White Rock Minerals to refocus attention on its Mt Carrington gold and silver project in Australia.
With precious metals prices running strong, the timing is fortuitous for White Rock, which was listed with the aim of redeveloping the highly advanced Mt Carrington mine, located in northern New South Wales. It has completed a scoping study and a preliminary feasibility study (PFS) which confirmed positive economics.
"Last year we were very focused on Red Mountain, but now with a major shareholder and joint venture there, we've turned our focus back to Mt Carrington," said White Rock Managing Director Matt Gill, speaking on the sidelines of the Noosa Mining & Exploration Investor Conference.
"And in this current strong Australian-dollar gold price environment, Mt Carrington is a different and far more robust animal."
Indeed, a 2017 PFS into the “Gold First” development stage declared a maiden ore reserve of 3.47 million tonnes at 1.4g/t gold for 159,000 ounces gold within a resource of 341,000 ounces of gold and 23 million ounces of silver.
The stage one PFS confirmed Mt Carrington as a viable gold first project with significant potential upside in subsequent silver production and future gold and silver exploration.
"Under the current Australian gold price, it pays back in a year and generates some $10-$20 million in free cash annually," Gill said.
"Some people says it’s small, only 35,000 ounces a year, but I prefer to make money any day over lots of ounces. There are lots of mines producing lots of ounces, but not making much, if any, money."
The next step for Mt Carrington is the environmental approvals process, which Gill estimates could take 12-18 months.
That will leave the project fully permitted and take the feasibility study to the bankable stage. Importantly, given much of the infrastructure for a mine is already in place, some $20m worth in fact, the build-out phase should only take a further 12-18 months.
"Sitting here today, two to three years for a bar of gold," Gill said.
Uniquely, Mt Carrington holds separate gold and silver deposits, giving White Rock flexibility depending on metals prices - one of the very few companies on the ASX that has an equivalent amount of silver at hand.
"We could actually choose to mine the silver first if we wanted to, because it's not a by-product of the gold," Gill said.
Turning to its Alaskan assert, last week Sandfire committed to an additional US$1.5M beyond the original A$6m for 2019 to expand the 2019 field season at White Rock’s Red Mountain high-grade zinc and precious metals VMS project 100 km south of Fairbanks.
Sandfire is currently funding stage one of an earn-in and joint venture option agreement (whereby an initial $20 million Australian dollar expenditure will earn Sandfire 51 per cent). White Rock is the manager of this year’s program and of the project at large.
"Sandfire's involvement is a great endorsement of what we are doing in Alaska," Gill said.
The additional US$1.5m expands the total 2019 budget committed to exploration at Red Mountain to more than A$8m.
Jim Regan is a former Reuters finance and commodities reporter, and is a contributor to the Investor Insight content team. Cannings Purple is proud to be a sponsor of the Noosa Mining Conference.