The company is cashed up and on track to move the project, which sits in Western Australia’s Leonora district, forward in a big way over the rest of the year.

Last week, Saturn unveiled a A$25 million capital raising to fund its plans. The raising comprised a A$23 million two-tranche placement and share purchase plan to raise up to a further A$2 million.

Saturn managing director Ian Bamborough told the Resources Rising Stars Gather Round Conference in Adelaide yesterday that the SPP was going well, which is no surprise given the stock is already trading above the issue price.

Both offers had an issue price of A21.5c, against yesterday’s closing price of A24c.

The upsized raising attracted strong support from new and existing shareholders, with largest shareholder, Canada’s Dundee Corporation, chipping in just over A$6 million to increase its stake to the maximum 19.99%.

Hedley Widdup’s Lion Selection Group invested A$4 million, increasing its stake from 17.6% to almost 18.9%.

It makes Saturn Lion’s biggest and most valuable investment across its portfolio of mostly Australian gold stocks.

Economies of scale

The funding, which is in addition to cash on hand of A$4.5 million, will be used to deliver a prefeasibility study and initial ore reserve for Apollo Hill later this year.

Bamborough described Apollo Hill as “Australia’s next new virgin gold operation”.

Saturn is developing Apollo Hill as a large-scale, bulk tonnage heap leach operation. While heap leach gold operations aren’t common in Australia, the technology is simple and proven and accounts for almost half of the world’s gold production.

Apollo Hill has a measured, indicated and inferred resource of 118.7 million tonnes at 0.53 grams per tonne gold for 2.03 million ounces of gold.

“All of our ounces are contained within one single, simple pit,” Bamborough said.

The company released a preliminary economic assessment in 2023, based on the previous resource of 1.84Moz of gold.

Capital costs were forecast at A$304 million for a 10Mt per annum operation to produce 1.63Moz, or 122,000ozpa, over 10 years.

Importantly, operating costs are set to be a competitive A$24 per tonne for an all-in sustaining cost of A$1857/oz.

Using a very conservative gold price of A$2665/oz, life-of-mine EBITDA would be just over A$1 billion and pre-tax, undiscounted free cashflow would be A$688 million.

The study returned a net present value of A$388 million, internal rate of return of 30% and payback period of 2.8 years.

At the current gold price of more than A$5000/oz, the payback period is likely to be well under 12 months.

“We’re highly leveraged to the gold price,” Bamborough said.

The company is expecting the PFS to be followed by a definitive feasibility study next year and move into construction in 2027, with first gold targeted for 2028.

“We’re getting this thing ready for production as soon as possible,” Bamborough said.

Low costs

One of the reasons for Apollo Hill’s projected low costs is the orebody.

“The thing sticks out at surface,” Bamborough said.

The orebody is a large “blob” of ore which will lead to a 2.5k-long shallow pit. As a result, Apollo Hill is set to have a strip ratio of just 1.5:1 with no pre-strip.

Bamborough said the economics also benefitted from having very wide ore zones, which allowed for the use of large equipment.

“You could stand on the pit floor and see nothing but ore for 180m,” he said.

Apollo Hill has “simple, clean, efficient” metallurgy, according to Bamborough.

“There’s nothing complicated in this one,” he said. “It’s very elegant from an operational perspective.”

The PEA assumed 75% recoveries over a 180-day stacking schedule, both of which are conservative.

Exploration upside

Saturn’s next resource upgrade is targeted for July, which will feed into the PFS and initial reserve estimate.

The company is in the middle of its largest-ever drilling program, with 25,000m already completed and another 35,000m underway.

“We’ve always been explorers. We always will be,” Bamborough said.

Results to date have included 53m at 1.08g/t gold from 128m, including 16m at 3.02g/t and 29m at 1.69g/t gold from 164m, including 5m at 8.94g/t gold.

Saturn holds 1000 square kilometres of ground around the Apollo Hill deposit, which is considered underexplored.

The company has already discovered 16 prospects and Bamborough said there was no reason it couldn’t discover something larger than Apollo Hill. “We’re spending a lot of energy on the drill bit,” Bamborough said.