PERTH (miningweekly.com) – A feasibility study has increased the Gruyere gold project's expected output from 265 000 oz/y to 270 000 oz/y and also increased its expected capital costs from A$455-million to A$507-million.
Owner of the Western Australia-based project, Gold Road Resources, on Thursday told shareholders that the feasibility study confirmed Gruyere to be one of the longest life, lowest-cost undeveloped gold deposits in the world, with the mine life expected to reach 13 years, and all-in sustaining costs estimated at A$945/oz.
The project will be developed as a single large openpit mine with a plant capable of handling 7.5-million tonnes a year of fresh ore, and up to 8.8-million tonnes a year of oxide ore.
The study estimated the project to have a net present value of A$486-million and an internal rate of return of 24%.
“Since the completion of the initial scoping study in 2015, a significant amount of work has been invested in the Gruyere project studies, culminating in this impressive feasibility study,” said Gold Road MD and CEO Ian Murray.
“The very thorough and high-quality work delivered by the owner’s team is self evident as is the economic strength of the project, with its demonstrated low costs, strong cash flows and rapid payback.”
Murray said that, while the feasiblity study demonstrated a significant project life, exploration potential at Gruyere and the surrounding Yamarna region meant that there was significant potential to extend the mine life.
Based on the positive outcomes of the study, Gold Road has recommended that the project be progressed to the construction phase, pending the successful completion of financing activities.
The company is in the midst of assessing whether to opt for a combination of debt and equity arrangements or a joint venture with a third party.
“We expect to be in a position to complete the funding aspects for the project and make the associated investment decision in early 2017,” Murray said.
Gold Road recently started limited early works at the Gruyere project, following the grant of several key miscellaneous licences. The work includes the planned construction of the accommodation village and the access road, and will cost an estimated A$18-million.