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Australia’s Manuka Resources (ASX: MKR) released on Tuesday the first mineral reserve estimate for what it calls the only production-ready silver resource in the country at its Wonawinta project, located in the Cobar basin of New South Wales.
Total ore reserves at the are estimated at 4.8 million tonnes grading 53.8 grams per tonne of silver, containing 8.4 million oz. of the precious metal. This is part of a total estimated resource that comprises 38.3 million tonnes at 41.3 g/t for 51 million oz.
Wonawinta was previously developed as a shallow silver oxide project with four approved mine pits. Manuka took over the project in 2016 and, following a review period, began implementing a restart plan. The project currently has all mining approvals current and intact, and a process plant fully constructed.
The reserve estimate, says Manuka, gives the company a clear production pathway and the potential for revenues from gold and now silver following the restart of the Mt Boppy gold project located 150 km away from Wonawinta.
Manuka’s team has been infill drilling the current oxide resources on the Wonawinta mining lease while also testing the deeper mineralized sulphide ores (silver, lead and zinc). This was occurring whilst toll processing of the Mt Boppy gold ore is carried out at the Wonawinta plant.
Mt Boppy is the site of a historical mine that operated between 1901-1923, and at one time was one of the largest gold producers in Australia.
According to Dennis Karp, Manuka’s executive chairman, the process plant at Wonawinta has been kept in good working condition and has been on active care and maintenance since the processing of the gold bearing stockpiles hauled from Mt Boppy ceased in February 2024.
“It therefore stands ready to come back online at short notice,” he said, adding that the prospect of restarting Wonawinta following gold production from Mt Boppy provides “an excellent optionality on silver and the potential to take advantage of the very buoyant precious metals prices.”
Manuka is now reviewing its economic model for the Wonawinta mine development, which will include re-entering the two existing pits (Boundary and Manuka) plus the development of two new pits (Belah and Bimble). The company expects to announce the outcomes from this analysis during the current quarter.
Based on the current silver forward curve and an all-in sustaining cost of A$40.51/oz., the mine plan would deliver net operating cash flows of approximately A$100 million based on the ore reserve alone, Manuka estimates.
