PERTH (miningweekly.com) – Gold hopeful RNI, previously Resource and Investment, has completed a review of its gold production strategy for the Grosvenor project, in Western Australia.

Previous studies have estimated that the Grosvenor project could have an eight-year mine life, with the 1.4-million-tonne-a-year operation producing about 545 000 oz/y of gold.

The project was estimated to have a net present value (NPV) of A$103-million and earnings before interest, taxes, depreciation and amortisation of A$260-million.

RNI told shareholders on Monday that the previous mine design and schedule had focused on maximising gold ore reserves and mine life at the then prevailing gold price, with a reduced focus on short-term payback capacity.

However, the ASX-listed company said that a review of the project had identified several alternative mine designs and schedules to address a number of factors, including the lower gold price environment, early cash flow generation for debt servicing and the repayment of financiers, and the pursuit of ongoing production, subsequent to the debt being repaid.

A series of revised schedules have been produced from the review, which would build on each other. The first scenario would only consist of an openpit operation, which would then be followed by the inclusion of the remaining available Grosvenor reserves, excluding the Daylight cutback inventory.

The Starlight underground and Peak Hill projects would then be incorporated into the project, followed by additional mining inventory sourced from a modified Daylight cutback.

Under the revised strategy, RNI was able to improve the payback period from more than seven years to around three years, while also reporting a positive free cash flow and NPV for all the mine cases presented.

RNI told shareholders that the adoption of a specific case and a decision to mine would depend on the particular terms and conditions of any particular project financing deal.

The company had now appointed corporate adviser PCF Capital Group to assist with the financing requirements.