Guess which ASX 200 gold stock is leaping higher today on big expansion plans

S&P/ASX 200 Index (ASX: XJO) gold stock Catalyst Metals Ltd (ASX: CYL) is charging higher today.

Catalyst Metals shares closed yesterday trading for $5.46. In early morning trade on Tuesday, shares just jumped to $5.91 each, up 8.2%. At time of writing, shares are changing hands for $5.75 apiece, up 5.1%.

For some context, the ASX 200 is up 1.1% at this same time.

Here’s what catching investor interest.

ASX 200 gold stock jumps on growth plans

Catalyst Metals shares are leaping higher after the miner announced the results of a review seeking to increase the throughput capacity of its Plutonic processing plant, located in Western Australia.

The ASX 200 gold stock said it initiated the review after reserves at its Plutonic Gold Belt project increased from 500,000 ounces to 1.5 million ounces amid ongoing exploration successes.

In September, Catalyst released a 10-year production plan showing growth in gold production at Plutonic from 100,000 ounces to 200,000 ounces per year.

The company is looking to increases the plant’s processing capacity from the current 2.0 million tonnes per annum (Mtpa) to between 2.5Mtpa and 3.0Mtpa.

The miner expects that capacity boost will cost between $50 million and $75 million.

Catalyst noted that this potential low capital means to mill throughput expansion is based on refurbishing a second processing circuit that’s been on care and maintenance.

This second circuit, situated next to the operating plant, can be restarted without needing any significant approvals. And it’s able to leverage Plutonic’s existing infrastructure and workforce.

As yet, the ASX 200 gold stock has not made a firm decision on whether to expand the plant’s throughput. This will hinge on further exploration success across its Plutonic Belt project.

What did Catalyst Metals management say?

Commenting the expansion plans helping to lift the ASX 200 gold stock today, Catalyst Metals CEO James Champion de Crespigny said, “This optionality to expand Plutonic’s milling capacity, along with ongoing exploration success, will further de-risk Catalyst’s long-term 200,000 ounce per annum production plan.”

Champion de Crespigny added, “It is an option that will allow additional ore sources, including lower grade, bulk, open pit material to be included in the plan.”

He concluded:

Between 1990 and 2008, Plutonic sustained average gold production rates much higher than today. This was a product of a 3Mtpa processing plant and large mineral endowment. Both attributes remain at Plutonic today, albeit they have suffered from underinvestment.

Catalyst has invested heavily in infrastructure and exploration. The goal has been to return Plutonic to a long life, self-sustaining, gold production centre commensurate with the scale of the mineral endowment. We believe that to be around 200,000 ounces per annum.

The post Guess which ASX 200 gold stock is leaping higher today on big expansion plans appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.