Calidus Resources (CAI) - $23M Growth Capital to Deliver 130,000oz?

Calidus Resources Ltd. is an Australian-based and ASX-listed gold producer focused on its Warrawoona Gold operation located in the East Pilbara district of the Pilbara Goldfield in Western Australia. The operation is 100% owned by the company and boasts a global resource of 43.7 Mt of ore at an average grade of 1.06 g/t gold, with an envisioned annual production of 130,000 ounces of gold.

Calidus Resources plans to increase its annual production from 70,000 to 130,000 ounces in the next few years. Dave Reeves, the managing director of Calidus Resources, recently discussed the company's first quarterly report and plans to raise capital through equity instead of debt or royalties due to risk and sensitivity. 

Funding for expansion and royalty pricing

Calidus Resources plans to raise $23M in equity capital to fund its expansion phase, along with existing capital. The company decided to go with equity capital instead of debt or royalties due to sensitivity and risk factors. Dave also mentioned that royalty companies are using outdated gold pricing, causing a lag in returns.

Increase in production of high-grade material to generate more cash

Calidus Resources plans to optimize open pit and underground mining to displace lower grade material, resulting in an increase in production of high-grade material to generate more cash. The company expects the increase in production in the second half of the year with the completion of the airport project.

Increasing underground mining 

Calidus Resources plans to increase underground mining and blue spec ramp up over the next 2.5 years to reach its goal of producing 130,000 ounces annually. The company is looking to reduce costs of blue spec through different plant sourcing and access to nearby camp. Underground mining is also becoming more attractive in the next six months. Dave mentioned that the company needs funding for cash reserves and free cash flow, but reinvesting in the ground makes sense to fully utilize infrastructure and increase cash flow.

Finalizing funding solution 

Calidus Resources is finalizing its funding solution to decide on project start dates. The company is also doing exploration work on a new discovery called Felix and familiarizing with geology at the main pit to move to East and West for adding mine life.

To find out more, go to the Calidus Resources website