Manuka (ASX:MKR) gold processing to happen on-site at Mt Boppy operation

Manuka Resources is streamlining its operation by moving production on-site in a near-term effort expected to deliver hefty savings from the Mt Boppy gold mining operation in the Cobar Basin of New South Wales.

Previously hauling ore 150 kilometres south for processing at its Wonawinta Silver Mine, Manuka believes a fit-for-purpose 200,000 tonne per year on-site processor will materially enhance the value of Mt Boppy and other near-mine prospects.

While capital required for on-site processing is estimated at around $10 to 15 million, savings from Mt Boppy haulage alone is expected to recoup that cost in a couple of years time.

The Mt Boppy site is already fully permitted for processing and on-site production, and Manuka has scheduled the facilities to be online and producing gold dore before 2025.

Having produced about 500 thousand ounces of gold at 15 grams per tonne, Mt Boppy has historically been one of NSW’s richest gold mines.

Manuka Executive Chairman Dennis Karp said that since acquiring Mt Boppy in 2019, production performance had largely exceeded its initial forecasts, notwithstanding the fact it was processing ore through Wonawinta.

“Our decision to transition to on-site processing at Mt Boppy will increase operational flexibility and deliver lower operating costs. We estimate that the savings in ore haulage alone will be in the order of A$6-7 million per year,” Karp said.

“The step-change in cost base supports a robust business case for the continued near-term processing of gold-bearing rock dumps and tailings and deliver cashflows to fund aggressive brownfields exploration at Mt Boppy and at near-mine prospects such as Pipeline Ridge.

“With gold and silver markets buoyant, we are excited by the immediate opportunity to reestablish ourselves as an ASX precious metals producer in the Cobar Basin, whilst progressing in parallel the development of our world-class Taranaki VTM Iron Sands Project in New Zealand.”

The Wonawinta mine is currently under care and maintenance, but Manuka is confident dedicated processing at Mt Boppy will allow for dual revenue streams.

An optimisation study is underway for a Wonawinta restart, and Manuka is expecting to release an updated reserve and production plan next month for silver mining.

Mt Boppy’s historical production came from a relatively constrained area and, after mining, Manuka intends to progress the site as an advanced exploration asset over underground resources and the surrounding exploration lease.

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