Catalyst Metals (ASX:CYL) is set to expand its footprint in Western Australia’s Plutonic Gold Belt with the acquisition of the Old Highway Gold Project from Sandfire Resources for A$32.5 million. This acquisition marks Catalyst’s initial expansion beyond the Plutonic Belt and introduces a near-term gold development opportunity, strategically located 40km southwest of Plutonic’s processing plant. The acquisition will be funded through existing cash reserves and sale proceeds from Henty. Catalyst is also in discussion to secure a covenant light corporate facility. Kaiser Reef shareholders of Henty approved the deal May 7th.
Catalyst anticipates significant cost reductions due to Old Highway’s proximity to the Plutonic plant, enhancing the project’s economic viability. Initial estimates suggest a pre-tax NPV of A$280 million at A$5,000/oz gold prices and an AISC of A$1,588/oz over a four-year mine plan. The project boasts a Resource of 206,000oz at 3.0 g/t gold, including a higher-grade underground component of 140,000oz at 4.6 g/t gold.
Planned development of the underground deposit highlights compelling key metrics including a steady state production of 35koz pa and an average annual free cash flow of A$74 million at A$5,000/oz gold. Catalyst Managing Director James Champion de Crespigny believes that Old Highway is another ore source for Plutonic’s processing plant. The Plutonic processing plant is underutilised and requires additional ore sources.
The acquisition also comes with access to the DeGrussa aerodrome, saving Catalyst an estimated A$15 million in runway sealing costs at Plutonic. Beyond the immediate development potential, Catalyst sees substantial exploration upside at Old Highway and surrounding prospects like Maficanti and Cow Hole Bore. Catalyst intends future exploration drilling to grow resources and extend mine life, solidifying its position in the Plutonic Gold Belt.
