Fortified Gold expects to achieve its first gold pour in the first quarter of the year as it brings North Queensland’s Far Fanning mine back into production after more than a decade of dormancy.
And it is not stopping with one operation, with plans to develop further small-scale gold mines in the region in a ‘hub and spoke’ model, according to chief executive and general manager Ashley Van Kruyssen.
“Fortified Gold is doing due diligence on three projects at the moment,” he said.
“We’re definitely looking for more assets anywhere within a 500km radius of Charters Towers.”
Mr Van Kruyssen said the private company was investing about $12 million to bring Far Fanning online after buying the asset from Tower Holdings.
This includes purchasing a Knelson concentrator and CIL (carbon in leach) circuit with the capacity to process 60 tonnes of ore an hour.
Fortified Gold has been stockpiling ore left from the previous operator to process in that circuit, which is expected to be commissioned in February.
At a grade of about 2.5-3.5g of gold per tonne, this ore had been unviable under the previous operation, which involved haulage rather than on-site processing, Mr Van Kruyssen said.
“Our first gold pour should be at the beginning of March,” he said.
“That initial production will be from the stockpiled ore and we will start full mining production by mid-February/early March.”
The company aims to process around the clock to achieve a production rate of about 30,000 ounces a year over a mine life of six years.
It will employ a drive in-drive out workforce of about 25-30 in full production.
Mr Van Kruyssen said the site, between Townsville and Charters Towers, had not been mined since 2002.
The resource in the ground is estimated at 253,000 oz of contained gold and there is about 70,000 tonnes of stockpiled ore.
Current gold prices meant a good profit margin for the Far Fanning operation, with leeway for prices to fall, Mr Van Kruyssen said
They also meant there were many other similar scale gold projects throughout regional Queensland that would now be viable.
“The problem you have is that most of the small leases like this are owned by junior or mid-tier ASX- listed companies that are not as production focused and unfortunately (the assets) can sit around until a deal gets done or a company merges and its goes on to the next person,” Mr Van Kruyssen said.
“The in situ value (of the gold) keeps value in the company but is not creating cash flow.”
Mr Van Kruyssen started Fortified Gold with a partner as a privately funded company and says its small, dynamic structure means decisions can be made quickly.
He describes himself as an entrepreneur who has a background including an early stint in underground mining interstate, property development and commodities trading.
He bought his first small mining project with other developers under the mantle of Developed Iron Ore in 2012 – taking in the far north Queensland iron ore assets of Mount Ruby, Mount Paddy and Mount Lucy.