Southern Gold is forging ahead with the development of a new gold mine in Western Australia after positive results in a pre-feasibility study.
The study indicated the Cannon Gold resource, located 30 kilometres from Kalgoorlie, could produce more than 68,000 ounces of gold over its three-year mine life.
In a statement to the ASX, Southern Gold announced that it had confirmed a low capital, near-term development pathway for its 100 per cent owned project.
The company said the pre-feasibility study outlined an open pit and underground development strategy that is “technically feasible and delivers a positive economic outcome”.
Southern Gold managing director Nanette Anderson said the study was an important milestone for the company, putting it in a strong position to fast-track the development of the mine subject to securing financing and regulatory approvals.
“Cannon has a number of significant competitive advantages in that the mineralisation starts close to the surface and can be extracted through an efficient open/pit underground operation”, Anderson said.
“This combined with its location close to a number of existing milling facilities in the Kalgoorlie region give us the ability to consider a low CAPEX, fast track development pathway based on a toll-treament scenario.”
Southern Gold has indicated mining operations at Cannon could start within the first half of 2014.