PERTH (miningweekly.com) – A scoping study into the Mandilla gold project, in Western Australia, has estimated that the project could produce 845 000 oz of gold over an 11-year mine life.

ASX-listed Astral Resources on Thursday said that the project would require a pre-production capital spend of A$191-million, and could generate a free cash flow of A$740-million at a gold price of A$2 750/oz, with the net present value estimated at A$442-million and the internal rate of return at 73%.

The scoping study estimated an all-in sustaining cost of A$1 648/oz.

The Mandilla project is expected to have an average yearly gold production target of 100 000 oz over the first seven-and-a-half years, reducing to an average of 41 000 oz/y for the remaining three-and-a-half years with the treatment of lower-grade stockpiles.

“We are pleased that the Mandilla scoping study has confirmed the potential for Mandilla to become a highly profitable standalone gold operation,” sad Astral MD Marc Ducler.

“Mandilla is situated in the premier Goldfields region of Western Australia and is firmly established as one of the best free-milling, openpit resources in this district in both scale and quality of project.

“The study outlines compelling financial metrics for a Mandilla development, with projected free cashflows of approximately A$740-million over a life-of-mine of 11 years and a payback period of less than a year for total pre-production capital expenditure of approximately A$191-million.

“The Study financials have been modelled using a gold price assumption of A$2 750/oz which is lower than the spot price has been for the past six months and using a five-stage openpit design based on a A$2 100/oz pit optimisation. This further highlights the potential upside for a Mandilla development,” said Ducler.

“Astral continues to advance exploration and resource definition efforts at Mandilla, as well as at the company’s nearby Feysville gold project, while simultaneously progressing prefeasibility studies as it seeks to deliver on its strategy of building another quality Western Australian mining operation.”