In a major step towards production, Dreadnought Resources (ASX: DRE) has delivered a robust scoping study for its Star of Mangaroon gold project in Western Australia’s Gascoyne region. The study outlines a high-grade, low-cost open-pit operation with significant potential to establish Dreadnought as a self-funded explorer.
Located approximately 250 kilometres southeast of Exmouth, the Star of Mangaroon mine sits in a region historically underexplored due to fragmented ownership. Dreadnought’s modern exploration efforts have consolidated this opportunity, setting the stage for what could be a transformative development for the company.
The scoping study projects an initial production target of 20,000 ounces of gold at an impressive grade of 10g/t over 12 months. The high-grade nature of the deposit is complemented by strong financials, with an all-in sustaining cost (AISC) of $1,800/oz, well below the current gold price, which has hovered around $4,400/oz.
At a base case gold price of $4,100/oz, the operation is expected to generate $40.1 million in operating cash flow after capital and taxes. Capital requirements are modest, capped at $10.2 million, making the project financially attractive and manageable.
Importantly, the mineralisation remains open along strike and at depth, hinting at the potential for future resource growth. Dreadnought’s Managing Director, Dean Tuck, underscored this point, stating:
“This study highlights the significant opportunity the Star of Mangaroon presents. It serves as the foundation for our strategy to become a self-funded explorer. Cashflow from this project could not only fund further exploration but also return capital to our shareholders.”
Dreadnought’s approach to development centres on outsourcing key operations, a model that reduces upfront capital expenditure and leverages existing infrastructure. A non-binding agreement with Black Cat Syndicate Ltd allows Dreadnought to process ore at Black Cat’s Paulsens processing facility, located 330 kilometres from the mine.
The project’s operational plan includes contract mining, haulage, and processing, allowing Dreadnought to focus on exploration and project expansion. A one-month lag between mining and processing ensures a smooth operational workflow.
The planned open-pit design spans 250 metres in length, 180 metres in width, and 85 metres in depth. The scoping study estimates that 62,100 tonnes of ore will be mined at an average grade of 10g/t, recovering 19,500 ounces of gold at a metallurgical recovery rate of 98%.
The infrastructure will include a mobile mining camp, haul roads, and waste storage facilities, all designed to support the streamlined, contract-driven operation.
While the scoping study focuses on a 12-month production window, Dreadnought has its sights set on extending operations. Five granted mining leases, including Popeye, Pritchard’s, and Two Peaks, are already in play, offering a fast track to additional resource development.
The Popeye prospect, located less than a kilometre from Star of Mangaroon, has returned high-grade intercepts, including 3m at 22.8g/t gold from just 13 metres depth. Such results highlight the potential for near-term resource growth.
Adding further intrigue is a historical heap leach facility within the pit crest, which has returned grab sample assays of 10g/t gold. Systematic sampling of this facility could identify additional economic material to bolster project economics.
The Star of Mangaroon mine has a storied past, producing 7,464 ounces of gold at an extraordinary grade of 34.8g/t between 1960 and 1983. Despite its high-grade history, the broader Mangaroon Gold Camp has seen limited modern exploration, largely due to fractured ownership and shallow historic drilling.
Dreadnought’s consolidation of the region has allowed the company to apply modern geochemical and geophysical techniques. This work has already generated new, larger targets with stronger mineralisation signatures than those associated with historic mining.
As with any scoping study, the numbers are preliminary, and further work is required to de-risk the project. Thirteen per cent of the initial production target relies on inferred resources, which come with a lower level of geological confidence. Additional drilling will be essential to upgrade these resources and confirm their economic viability.
Funding also remains a critical factor. The scoping study assumes a maximum cash drawdown of $10.2 million. While Dreadnought’s management is confident in its ability to secure funding, market conditions and other variables could influence the outcome.
The company has acknowledged these risks, stating in its announcement:
“The Study is a preliminary technical and economic assessment. Investors should note that there is no certainty the outcomes will be achieved.”
Dreadnought is forging ahead, with a busy 2025 ahead. Early in the year, the company plans to complete environmental studies, secure water sources for operations, and finalise approvals. Resource drilling is also on the agenda, targeting both extensions to the Star of Mangaroon and new discoveries at nearby prospects.
By mid-2025, Dreadnought aims to finalise its mining and processing agreements, with production commencing later in the year. Meanwhile, exploration will continue across the broader Mangaroon tenements, including the camp-scale prospects at Bordah and High Range.
The Star of Mangaroon represents more than just a mining project—it’s a pivotal piece in Dreadnought’s broader strategy to become a self-funded explorer. By using cashflow from high-grade gold operations to fund exploration, the company aims to reduce its reliance on external funding while creating shareholder value.
With gold prices at multi-year highs, the timing couldn’t be better. If Dreadnought can deliver on its scoping study promises, the Star of Mangaroon could prove to be a company-making asset, unlocking the broader potential of the Mangaroon region.
As Dean Tuck put it, “With high-grade gold, a robust study, and an aggressive exploration strategy, 2025 is shaping up to be an exciting year for Dreadnought and its shareholders.”