Manuka Resources Limited (ASX:MKR) is making waves in the silver and gold production scene, particularly in the Cobar Basin. With a fresh 10-year production plan on the table, this company is ready to fire up its Wonawinta processing plant, all while aiming for impressive financial gains in a promising market environment.
A Closer Look at Manuka’s Ambitious Plans
Recently, Manuka Resources rolled out its ambitious production roadmap, leveraging its fully owned silver and gold assets in the rich Cobar Basin.
The plan is no small feat—it’s set to extract and process an impressive 10.7 million tons of material, which includes a staggering 19.2 million ounces of silver, along with gold credits. What’s more, this production target is backed by a solid 61% reserve base, laying a robust foundation for the company’s operational strategies.
To bring the Wonawinta processing plant back online, the capital expenditure is pegged at A$18.9 million. With silver prices hovering around A$50 per ounce and an average All-In Sustaining Cost of A$35 per ounce, this project is projected to generate an average EBITDA of A$22 million annually. The internal rate of return (IRR) is a remarkable 109%, coupled with a net present value (NPV) of A$101 million. These figures don’t just look good on paper; they reflect a project ripe with potential profitability and alignment with the company’s long-term aspirations.
Funding Strategies and Market Dynamics
Currently, Manuka Resources is actively engaging with various financiers to secure funds aimed at refinancing existing debts and powering the restart of the Wonawinta facility. To bolster these discussions, the company has been proactive in providing independent technical and legal due diligence reports to potential investors. So far, several term sheets have landed on the table, and the company is eyeing binding agreements to be finalized by early in the third quarter of this year.
In a significant move, Antanas Guoga, a well-known investor in Manuka, has acquired security shares previously held by GAM Company Pty Ltd. The cancellation of associated convertible notes further strengthens the company’s financial standing as it seeks to boost its operational capacities.
Mining Operations and What Lies Ahead
Shifting focus to the Mt Boppy Gold Mine, located a mere 50 kilometers east of Cobar, Manuka is exploring the feasibility of extracting approximately 53,500 ounces of gold from its existing resources. Historically, Mt Boppy has been a gold powerhouse, producing around 500,000 ounces at an average grade of 15 grams per tonne. After some temporary production pauses due to harsh weather, the company is optimizing its open pit designs to maximize recovery potential.
In the coming quarter, Manuka plans to unveil findings related to the re-optimization of the Mt Boppy Gold Mine, along with updates on financing and production strategies in the Cobar Basin. With precious metal prices on the rise, particularly for gold and silver, could this be the perfect moment for Manuka to boost its operations and shareholder value?
In summary, Manuka Resources stands at a pivotal crossroads. With a comprehensive production strategy and proactive financing efforts, the company is poised for growth. By focusing on the Cobar Basin and leveraging its historical production success against current market conditions, Manuka is well-positioned for a bright future in the Australian mining landscape. Isn’t it exciting to think about where they might go from here?
