Excelsior Gold Begins Definitive Feasibility Study for Kalgoorlie North Gold Project

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Researched by Industrial Info Resources Australia (Perth, Australia)--Following strong results from a pre-feasibility study completed in March, a long delay has allowed Excelsior Gold Limited (ASX:EXG) (Perth, Western Australia) to secure more than AU$4 million (US$3.7 million) of capital to begin a definitive feasibility study (DFS) for its significant Kalgoorlie North gold project in Western Australia.

The DFS is based on the development of various open pit and underground mining deposits centred on the large Zoroastrian and Excelsior deposits, which are located 30 to 55 kilometres north of Kalgoorlie. The current schedule, as planned by the company, outlines the Zoroastrian deposit as the priority for development, along with other satellite deposits, to be constructed ahead of the Excelsior open pit. Up to 2.6 kilometres of rail line linked between Kalgoorlie and Leonora will have to be relocated in order to prepare for Excelsior's arrival, which is scheduled for the fourth year of the project.

With almost 1 million ounces of gold resources buried throughout the site, Kalgoorlie North possesses all manner of location-specific advantages for Excelsior Gold Limited. The site's close proximity to processing facilities, operating mines, a local workforce, accommodation, road access and other existing infrastructure already means that Excelsior Gold will be able to keep capital costs down while rapidly developing the various pits required to begin production. Western Power is currently the priority provider of power to the site, through a connection to the Western Australian grid.

Multiple sources have confirmed that the AU$80 million (US$74 million) project will require a 1 million-metric-ton-per-annum carbon-in-leach mill to process more than 1 million metric tonnes of ore and 60,000 ounces of gold each year. Estimates place Excelsior to be capitalized at about AU$35 million (US$32.41 million), and at current gold prices could deliver almost AU$100 million (US$92.6million) in cash flow from production over a seven-year period.

Excelsior Gold will continue the DFS throughout 2014 and expects to finish it by March 2015. Upon necessary approvals to move ahead with the project, major contractors will be sought throughout 2015 in preparation for the project's optimistic kick-off date, sometime in the fourth quarter of 2015.

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