The idled Sugar Zone gold mine, near White River, “represents a rare and profitable production opportunity” for Vault Minerals to restart at very little cost.
But company management remains tight-lipped on when mining will resume at the underground operation, 30 kilometres north of town.
The Australian mid-tier gold miner is big on its enthusiasm for the practically turn-key underground mine, but is short on divulging definite timelines on a restart and how large the gold resource could grow to, despite conducting more than 90,000 metres of drilling in 2024.
“Critically, as a brownfield restart option, Sugar Zone also carries none of the cost, complexity, risk or lead times of greenfield mine construction,” said chair Russell Clark and managing director Luke Tonkin in a statement this month to shareholders this week.
The company claims it’s fully funded to capitalize on the “substantial mineral inventory” that Sugar Zone presents.
Ahead of its November annual general meeting, Vault reported a significant hike its gold resources and reserves at its three Western Australia mines, totalling 3.4 million ounces in reserves and 12.3 million ounces in resources.
Nothing new was posted for Sugar Zone, its only Canadian asset.
Sugar Zone sits at 325,000 ounces of gold reserves and 1.28 million ounces of resources. The current mine life is estimated to be more than 6.5 years.
“Sugar Zone is financially sound and has the potential to generate meaningful returns over a range of gold price outcomes,” said the company in a reserves and resources statement, released Oct. 22.
Vault Minerals was the new name revealed last month for this year’s merger between Silver Lake Resources and Red 5, two Australian mid-tier gold companies.
Silver Lake picked up Sugar Zone in a CCAA process-induced sale of the former Harte Gold property in 2022. The latter began mining at Sugar Zone in late 2018.
After evaluating the asset, Silver Lake decided to suspend operations in August 2023 and began drilling in and around the mine to get a better handle of the area’s geological structure and where high-grade gold is likely to be found. That information will be folded into a new mine development plan.
Silver Lake invested heavily on upgrades to the processing and service infrastructure, including purchasing new underground mining and loading fleet, which should move things along more quickly, efficiently and at a lower cost whenever mining resumes.
Vault said it sees great potential to open a new mining front in its emerging Sugar South Zone, immediately south of existing mine infrastructure with “significant untapped exploration opportunity” to grow the gold base at Sugar Zone close in to the mine and also further out on its 81,000-hectare property.
The drilling conducted during the company’s 2024 fiscal year indicates a gold resource that is “open in multiple directions,” especially plunging downward in its Sugar Main and Middle Zones. A number of high-grade drill hits were recorded on the fringes of this resource.
The Sugar South Zone will be a focus of further drilling heading into 2025.
On a mine restart, Vault dropped a hint that a restart decision could be a year and half away.
As part of a revised mine plan, Vault plans to eliminate paste backfill and expand its surface tailings storage capacity, which will mean construction of a second tailings area – the proposed Southern Tailings Storage Facility – on an existing mining lease. Vault said the location has been given approval under the Lands and River Improvement Act.
Vault said it has started the next stage of the required regulatory process to commence construction, including engineering and baseline studies, which are close to being finalized.
The company said it expects the approvals process to be completed over the next 18 months and it does not intend to resume mining operations until approvals to build and operate the tailings storage area have been received. This, Vault said, ensures that the capacity of its North Tailings Storage Facility isn’t exhausted before the south facility is ready to receive tailings.
Whenever operations do resume, Vault workers will be bunked down much closer to the job site. The company decided to pull stakes on its accommodation camp in White River and move it north and onto the property to cut down on the daily commute.
