Photo by: Reuters
PERTH (miningweekly.com) – The Batangas gold project, in the Philippines, was expected to benefit from the increase in the Australian dollar gold price, and the substantial reduction in fuel costs, owner Red Mountain Mining said on Friday.
Red Mountain reported that projected free cash flow from the project had increased from the initial A$30-million to A$45-million.
A November update on the project’s definitive feasibility study (DFS) estimated that the project would have a net present value (NPV) of A$17.6-million and an internal rate of return of 46%; however, with the updated financials, the project’s NPV had increased to A$28.5-million, at a gold price of A$1 600/oz, while the internal rate of return was 65%.
The DFS was based on a production target of 100 000 oz/y gold and 250 000 oz/y silver, with the Batangas project processing about 10.3-million tonnes of ore a year.
The project was expected to require a capital investment of A$22.7-million.
“The project is now at a turning point, with the improved gold price, reduced input costs and the new funding partnership giving us the impetus to complete the DFS and permitting, and move the Batangas gold project towards production," said Red Mountain MD Jon Dugdale.
He noted that the company had received endorsements from all of the potentially affected township councils for the Batangas project, and would now seek an endorsement from the Lobo municipal council, prior to the project proceeding to the central Mines and Geosciences Bureau for approval.