PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Hayes Creek zinc-gold-silver project, in the Northern Territory, has found that the project would require a capital investment of A$58-million to construct a 450 000 t/y sulphide flotation process plant and associated infrastructure.

ASX-listed PNX Metals said on Wednesday that the project is expected to deliver annual concentrates of 18 300 t of zinc, 14 700 oz of gold and 1.4-million ounces of silver, generating net smelter revenues of A$628-million over a six-and-a-half-year mine life.

The PFS estimated that the project would have a pre-tax net present value of A$133-million and an internal rate of return of 73%, with the pay-back period estimated at 15 months.

“The completion of this PFS is a significant milestone for the company and confirms the strong potential for the Hayes Creek project to become a low-cost, high-margin zinc and precious metals mine,” said PNX MD James Fox.

“The low upfront capital requirement of less than A$60-million will enable the project to produce in-demand, high value zinc and precious metals concentrates over an initial six-and-a-half-year period. The project is expected to yield a high rate of return resulting in rapid investment payback and a low level of risk appropriate to a junior developer.”

Fox noted that the project contains an attractive mix of commodities with a strong outlook, and significant project upside if prices were higher than forecast.

“Significant near-mine exploration potential exists where discovery and delineation of any additional economic resource would further enhance the value of the project,” he added.

The proposed development was based on a steady stage 450 000 t/y processing rate with ore sourced from initial openpit mining operations at Mt Bonnie and subsequent underground mining operations at Iron Blow.

In total, some three-million tonnes of ore will be processed over the initial mine life.

A definitive feasibility study will now be undertaken and will be completed by late 2018, along with continued progression of environmental and mining approvals that would allow for project construction, subject to project funding, to start in late 2018 or early 2019.

This would allow mining and production activities to start in late 2019.