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SUPERIOR GOLD
Strong fundamentals in place for this Western Australian gold produ
ucer
MINING | SUPERIOR GOLD
Superior Gold is a Canadian gold producer that owns the Plutonic Gold operations, comprised of the Plutonic underground mine, central mill and the Hermes open pit projects, in the tier one jurisdiction of Western Australia (WA). The Plutonic mine has been in continuous production since 1990 and has produced over 5.5 million ounces of gold during this time, making it one of WA’s largest historic gold producing mines. TSXVlisted Superior aims to produce 80-90,000 ounces of gold in 2020, which would provide the base for the company to ultimately deliver its stated goal of producing 100,000 ounces per annum through the addition of satellite open pit operations.
MINING | SUPERIOR GOLD
Superior made the difficult
Going underground
decision to sacrifice short-
The five-year plan outlines
term results at the Plutonic
a number of ways in which
operations in order to ensure
Superior will optimise the
its long-term success, posting
Plutonic underground mine
a revised annual production
in order to achieve average
target of 80-85,000 ounces
production from underground
following weaker production in
alone of 70-85,000 ounces per
the third quarter.
annum up to 2024.
The company recovered in
Superior will increase
Q4 to meet its revised annual
efficiencies by focusing on
guidance with 83,035 ounces
four mining fronts instead
of gold produced over the 12
of eight under the previous
months ending December 2019,
mode of operation. In order
although by then the focus had
to achieve this, Superior will
shifted to a freshly devised five-
boost development rates from
year plan for the underground
600 metres per month to more
life of mine (LOM) starting in
than 800 metres per month.
In the second half of 2019,
2020.
Other parameters outlined “We identified some issues
in the five-year plan include
in the middle of last year but
a stope grade of 3.5-4.5
if you look at our quarterly
grams per tonne, all-in
performance, we’ve gradually
sustaining costs averaging
been working towards
less than US$1,100 per ounce,
overcoming those challenges
and a commitment to spend
and setting ourselves on a path
US$6.5 million per year on
to the profitability that we saw
exploration at Plutonic.
back in 2017,” says Superior’s president and CEO Chris
“The five-year plan is all about
Bradbrook.
ensuring that the development
in front of us will enable us to maximise grade and enhance flexibility. The ultimate cost reduction is always achieved by maximising grade, because our underground mining costs remain pretty constant, so a reduction in unit cost per ounce is all about improving the grade.” The total underground resource is substantially larger than the quantity of mineralisation included in the LOM, and the expectation is that the ultimate mine life is longer than the five years covered by the LOM.
Corporate reshuffle The company’s five-year plan is a result of detailed analysis and work completed since Superior appointed Keith Boyle as chief operating officer (COO) in April last year. Boyle’s appointment was enacted by Superior in 2019 after determining that the company needed an extra layer of operational expertise and oversight.
MINING | SUPERIOR GOLD
“We are in a tier one jurisdiction and we have got one of the biggest gold systems in WA, which is Australia’s biggest gold producing district. We also have infrastructure that allows us the expand rapidly and at low capital” Chris Bradbrook, Superior Gold president and CEO “Keith brings an extra level of operational skill that allows us to focus and keep on track. As part of our new focus, we also added a new general manager last September, Alan Breen. He has got excellent international experience but it was Keith who became the catalyst for the upgrade of the entire operations team.” While bringing in new corporate direction last year, the company has maintained its focus on keeping general and administrative (G&A) costs down. In fact, G&A costs per ounce have remained among the lowest among its peer group since Superior went public in February 2017.
“Everything has a per ounce cost, including management and that has been a mantra of ours since I started the company,” Bradbrook proclaims. “That’s what we wanted to do, so that culture is very much ingrained in Superior.”
The open pit opportunity Alongside the new plan for the underground mine at Plutonic, Superior expects to be able to add ounces to its production through the addition of several open pit deposits. The company started commercial gold production from the Hermes open pit in March 2018 but suspended operations in May 2019 ahead of its new five-year plan. Superior is currently working on the optimisation of its open pit resources, including the Hermes deposit, which will CHRIS BRADBROOK, PRESIDENT AND CEO
MINING | SUPERIOR GOLD
potentially be combined with the Hermes South project to create a single operation. A resource update for the open pits is expected towards the end of the first quarter or the beginning of the second quarter. “It’s not just the Hermes pit, there are a number of pits which will be included once we finalise the resource update. We expect to put out a revised plan for the open pits soon which will look at adding around 20-30,000 ounces per annum from open pit resources. Considering our 70-85,000 ounces underground target in the LOM, you can see that those combined could get us over 100,000 ounces sustainably.” Currently, it is anticipated that production from the Plutonic East/Perch pit could commence during the second half of 2020, once final mining permits have been received. Other near-term open pit resources include
It’s about thinking big and making sure that wherever we drill, we find mineralisation. We think this is a large system and there is a good possibility of finding additional resources. We will be targeting the favourable mafic volcanic host rock and the key structural settings.”
the Salmon and Workshop
Superior’s chief is keen for
deposits.
the company to look for other
Further resource growth
Plutonic-type targets in the area.
Superior is also chasing near
“It’s about thinking big and
surface and underground
making sure that wherever we
reserve and resource
drill, we find mineralisation.
growth this year and is in
“We think this is a large system
the process of creating a
and there is a good possibility
five-year exploration plan to
of finding additional
run alongside the five-year
resources. We will be targeting
underground mining plan.
the favourable mafic volcanic host rock and the key
Most of the easy-to-reach near
structural settings.”
surface resources at Plutonic have already been identified
Meanwhile, underground
according to Bradbrook, but
resource expansion has been
MINING | SUPERIOR GOLD
a key focus for Superior
limited exploration and
results as pleasing and said
since it took over the
development to date.
Superior will continue to
Plutonic operations, and this
release drill results in some of
commitment to underground
In December 2019, the
the other key areas of the LOM
exploration has been
company announced positive
plan, including Timor, Indian
underlined in the company’s
results from this area which
and Baltic, in the near future.
five-year mining plan.
illustrated the potential to extend the LOM plan to well
Filling the mills
Back in October, COO Keith
beyond five years. Highlights
Superior is also undertaking
Boyle revealed that Superior’s
of the drill results included: 1)
a calculation of a new global
immediate underground focus
26.0 g Au/t over 5.55 metres; 2)
resource for the Plutonic
would be on establishing four
210.0 g Au/t over 0.60 metres;
mine, the results of which will
key mining fronts, which
and 3) 13.2 g Au/t over 6.7
ultimately be incorporated into
would make the area between
metres.
a longer-term plan. Crucially
the Indian and Baltic zones an
for the company, it has access
area of significant interest, as
Following the announcement,
to a second mill within the
it is a zone which has received
Bradbrook described these
Plutonic premises, which
MINING | SUPERIOR GOLD
will allow it to easily ramp
company, Bradbrook appears
up should extra resources be
enthusiastic about Superior’s
discovered.
future.
The second mill has a capacity
“We are in a tier one
of 1.2 million tonnes per
jurisdiction and we have got
annum and is currently on
one of the biggest gold systems
care and maintenance but
in WA, which is Australia’s
can be brought back online
biggest gold producing district.
with minimal capex spend,
We also have infrastructure
according to the company.
that allows us the expand
Bradbrook believes the
rapidly and at low capital. I
possession of an additional
think we are extremely well
mill is a key differential for
placed in the current gold
Superior in the gold space.
market.”
“The gold price is very impressive right now. If we are in a prolonged period of high gold prices, you want to be able to deliver the maximum amount of gold into that. Most other companies don’t
SUPE RIOR G OLD AT A G L A N C E
have the capacity to do that, whereas we do. We can add more ounces into a strong gold market very quickly and with minimal capex.” STOCK TICKER Considering the strong fundamentals – such as a high gold price and operating in a strong mining jurisdiction – underpinning the
TSXV:SGI
MARKET CAPITALISATION US$30 million (as of March 24, 2020)
j
Published by Anderson Murray Media Ltd
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