PERTH (miningweekly.com) – A restart study into the combined Menzies and Laverton gold projects, in Western Australia, has estimated that a capital investment of around A$22-million will be required to initiate production.

ASX-listed Brightstar Resources said on Wednesday that the project would target an initial 322 617 oz of gold over a near eight-year mine life, with an average of around 45 000 oz/y recovered in the first five years of operation.

The restart scoping study estimated that first gold from the Menzies operation would be achieved within six months from the start of mining, and first gold from Laverton would be achieved within nine months from the start of the processing plant upgrades.

The scoping study estimated a net present value (NPV) of around A$103-million for the combined project, using a gold price of A$2 900/oz, and an internal rate of return of 79%, with a pay-back period of 1.5 years.

“It is pleasing to announce the results of our scoping study, which outlines a low-capital pathway to production from our assets. We have delineated four key deposits within our Menzies and Laverton gold projects which will deliver an executable eight-year life-of-mine plan, which will result in Brightstar becoming a meaningful gold producer in the Western Australian Goldfields,” said Brightstar MD Alex Rovira.

“The staged mine development has been optimised to minimise up-front capital costs, utilising operational cash flow to organically fund the refurbishment of the Laverton processing facility to minimise equity dilution and limit onerous debt and/or hedging exposure associated with large capex builds magnifying commissioning risks. The mine plan has been designed to minimise risks associated with ramp-up and deliver a profitable gold producer in Western Australia with significant upside to expand on the production profile and mine life.

“More importantly, when assessing key financial metrics for the return on investment in a challenging capital environment, the development of these gold projects is peer-leading in the Western Australian gold development sector.”

Rovira said that key profitability metrics such as internal rate of return and a ratio of the NPV divided by the capital expenditure were exceptional and spoke to the development ethos being employed by Brightstar to ensure that this project is appropriately fundable and mitigating all operational risks where possible.

“While we’re pleased to release the results of our scoping study and are progressing with a prefeasibility study, we continue to advance exploration efforts across the portfolio with the intent of finding additional ounces to add to the mine plan. We look forward to continuing our dual focus of development and exploration in the Goldfields, and building Western Australia’s next gold producer.”