Panoramic Resources is looking at an alternative plan to get its Gidgee gold project off the ground, re-scoping it to target a high-grade underground mine at the Wilsons deposit and slashing capital spending at the project.
Panoramic released its scoping study on Gidgee 13 months ago, saying it could be a 80,000 to 90,000 ounce a year gold mine for about $127 million, with cash costs of about $870/oz.
Since the gold price tumbled earlier this year, gold companies across the globe have cut exploration spending and pulled back expansion plans to cut production costs and reinvigorate investor interest in the sector.
Panoramic held only $23.3 million at bank at the end of June after falling commodity prices forced cost-cutting at its nickel mines and head office.
It also led to a $31.7 million after-tax loss for the last financial year, and the company would almost certainly need to return to the debt or equity market to fund construction of Gidgee.
The alternate option would drastically cut back plans for the mine. Panoramic said the revised option would look at an underground mine at Wilsons, with the planned open pit mines at other deposits in the area abandoned.
Wilsons would produce a concentrate containing 45,000 to 50,000oz of gold, either for sale to a third party or to be processed on site by bacterial heap leach.
The up-front capital costs at Gidgee would be slashed to $60 million to $70 million under the revised plan.Panoramic shares yesterday closed up 0.5Â¢ to 28Â¢.