VANCOUVER (miningweekly.com) – Nevada-focused project developer Pershing Gold has reported the positive results of a preliminary feasibility study (PFS) on its Relief Canyon mine project, recommending that Pershing advance the project to a production decision.
Based on a gold price of $1 250/oz of gold and $16.75/oz silver, the PFS calculated an after-tax net present value (NPV) of $126-million and an internal rate of return (IRR) of 85%, with the project expected to generate net cash flow of $167.7-million.
Along with the release of the results of the PFS, Pershing on Monday also revealed an upgraded mineral resource that includes proven and probable reserves of about 635 000 oz of gold (grading 0.72 g/t gold) and 1.6-million ounces of silver.
Compared with the June 2016 preliminary economic assessment (PEA), the PFS estimates capital expenditure (capex) at $23.6-million, compared with the $12.2-million previously anticipated, while the average life-of-mine (LoM) production climbed from 88 500 oz/y over a LoM of 5.8 years to 93 900 oz/y over 5.6 years.
All-in sustaining costs are slightly lower at $802/oz, compared with $804/oz previously.
Sustaining capex climbed from $16.6-million to $22.8-million.
Metallurgical testing incorporated into the PFS resulted in average gold recovery rates of about 83% on crushed and agglomerated material, an improvement from the recovery rate of 80% identified in the PEA. The Relief Canyon ore deposit contains an oxidised and partially oxidised gold mineral resources and reserves that metallurgical testing and historical mining experience indicate are amenable to cyanide heap-leach processing.
Chairperson and CEO Stephen Alfers characterised the PFS as a “major milestone” for the company. Pershing will be reviewing various options to cover future capital needs, including debt, royalty or stream financing, gold offtake agreements, investment from strategic investors, or combinations of those approaches, said Alfers.
Importantly, the Relief Canyon deposit remains open in three directions, presenting the opportunity for continued expansion and extension of this mine.