Catalyst Metals Ltd (ASX: CYL) shares are roaring higher on Wednesday.
In morning trade, the ASX gold share was up almost 6% to a 52-week high of $2.33.
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Why is this ASX gold share charging higher?
The catalyst for this gain has been the release of an announcement from the gold miner before the market open.
That announcement provided the market with the company's three-year production guidance, as well as an update to its group ore reserve estimate (ORE).
According to the release, Catalyst Metal's ore reserves now total 1million ounces of gold. Importantly, it notes that these reserves provide the foundation for its three-year production guidance, which aims to double production from 100,000 ounces to 200,000 ounces.
The ASX gold share advised that its production growth to 200,000 ounces will come with a total pre-production capital cost of $31 million. This includes transitioning the Plutonic gold mine from a remnant mine to a new one.
This $31 million cost is expected to be spread across 18 months and three separate mine developments – Plutonic East, K2 and Trident. Each development will occur one after the other.
In addition, Catalyst Metals has announced a $25 million exploration campaign for FY 2025. This includes a resource drill out of each of the three aforementioned mines in an effort to extend their mine lives to five years and at annual gold production of greater than 20,000 ounces each.
Significant exploration potential
The ASX gold share's managing director and CEO, James Champion de Crespigny, was optimistic on the company's plans. He said:
Catalyst has today provided to the market its three-year growth plan which is underwritten by 1Moz of Reserves. A year after consolidating the Plutonic Gold Belt, Catalyst has a strong balance sheet, stable operating cashflows and a pipeline of low-cost developments. What is all the more exciting is the opportunity to now turn our attention to growth through exploration.
Champion de Crespigny also highlights the significant exploration potential at the Plutonic gold belt. He adds:
The Plutonic gold belt is an attractive exploration opportunity with the very real possibility of a significant discovery. The historically fractured and foreign ownership of Plutonic has led to a considerable lack of exploration along the belt. Furthermore, the fact it is a brownfields opportunity, without the need for Catalyst to go chasing potentially dilutive capital, is very exciting. We plan to aggressively drill out and expand these three new mines – Plutonic East, K2 and Trident– well beyond their current life, along with dedicating the required capital to make further discoveries along the belt.
