VANCOUVER (miningweekly.com) – Junior explorer Wallbridge Mining on Thursday announced the positive results of a prefeasibility study (PFS) on its Fenelon gold mine, in Quebec, estimating a pre-tax net present value, at a 5% discount, of C$5.84-million.

Wallbridge, which specialises in exploiting small high-grade deposits, advised that a large proportion of the resource was located close to existing underground workings at shallow depth. The Toronto-headquartered company says the PFS estimates a pre-tax net cash flow of C$6.62-million and a project pre-tax internal rate of return of 92% for the initial 18-month mine life, for the known reserves located above 100 m depth and close to the existing ramp.

"With a high-margin pre-tax return of 92%, the PFS supports that Fenelon is well placed to become a high-margin, low-cost producer. The next key step in the development of Fenelon is the continuation of the permitting process, as well as exploration around the existing deposit to add potential ounces and extend the mine life,” CEO Marz Kord stated.

He added that, in parallel with the permitting and exploration, Wallbridge will be looking to secure the required C$5.24-million capital costs through a variety of options including offtake partners.

“With recent exploration results at Fenelon, we are optimistic that we can add additional ounces with very limited drilling by initially pursuing high-quality targets around the existing deposit. This exploration effort will continue from underground when in production in order to expand the deposit to depth and along strike,” Kord said.

Following the results of the PFS, Wallbridge will continue with the required studies and permitting of the project as it looks to bring the project to a production decision and into production.

The PFS was based on a gold price of C$1 689/oz (about $1 300/oz). Fenelon currently has compliant measured and indicated resources at a 5 g/t cutoff grade of 91 100 t grading 12.97 g/t for 38 000 oz. Proven and probable reserves comprise 28 922 oz new ounces, the company said.