URGENT UPDATE: Kalamazoo Resources has unveiled a groundbreaking scoping study for its Mt Olympus gold project in Western Australia’s Pilbara, revealing the potential for over 524,000 ounces of gold and up to $1.4 billion in free cash flow. This study, just released, positions the project to be a game-changer in the gold market, with capital costs recouped in under two years.
This exciting development could reshape Kalamazoo’s future, with the gold deposit expected to generate an impressive average production of 73,000 ounces annually, peaking at 110,000 ounces in year five. At a conservative gold price of $4,500 an ounce—well below current market levels—the study estimates a pre-tax NPV of $423 million and an internal rate of return (IRR) of 47 percent. However, with gold prices recently soaring past $6,000 an ounce, projections surge to a staggering $1.396 billion in free cash flow and an NPV of $842 million, with an enviable IRR of 74 percent.
Details from the study highlight an 8.5-million-tonne open-pit operation utilizing a 1.5 million-tonne-per-annum flotation circuit, producing a high-grade concentrate at 25 grams per tonne with an 86 percent recovery rate. The project’s robust profile marks it as a leading contender in the gold space, especially important given the increasing demand for gold amid market fluctuations.
Kalamazoo’s return to the Mt Olympus site, previously under the scrutiny of major players like De Grey and Northern Star, signifies a pivotal moment. The geological advantages combined with favorable market timing make this project a prime opportunity for investment. The proposed development will integrate the Mt Olympus–West Olympus open pit, with an impressive nine-to-one strip ratio and confidence bolstered by 83 percent of production targets supported by indicated resources.
In addition to the open-pit potential, Kalamazoo has identified a new underground resource of 174,500 ounces at 3.76 grams per tonne, with further exploration expected to yield additional resources. Recent corporate moves have expanded the company’s footprint in the region, including the acquisition of the Xanadu gold project, which adds 142 square kilometers to its holdings.
The Pilbara region, known for its mining infrastructure and proximity to major towns like Paraburdoo and Karratha, is rapidly re-establishing itself as a key gold growth area. With nearby projects such as Capricorn Metals’ Karlawinda project and Northern Star’s Hemi deposit, Kalamazoo’s deposit stands out for its high grade and accessibility.
As Kalamazoo prepares to engage with potential external partners to fund the $208 million capital needed to reach production, the company is optimistic about securing investments. Preliminary discussions indicate strong interest in the proposed gold-in-concentrate product, which could streamline financing efforts.
The upcoming pre-feasibility study, set for release next year, is expected to further validate these promising economics. If successful, Mt Olympus could transform into a central hub for gold extraction in the Pilbara, attracting renewed attention from larger players who may have overlooked the project when gold prices were lower.
Kalamazoo Resources is poised to make significant strides in the gold market, and with current projections, the Mt Olympus project could redefine its status as more than just a promising prospect. Stay tuned as developments unfold—this project is one to watch closely in the coming months.
