PERTH (miningweekly.com) – An independent third party review of the definitive estimate for the Gruyere gold project, in Western Australia, has increased the capital cost estimate to A$621-million, up from the previous budget of A$532-million.
Owners Gold Road Resources and Gold Fields said on Monday that the updated capital cost included scope changes and force majeure costs of A$30-million, as well as a A$30-million contingency.
Key contributors to the increased capital cost included a range of scope changes that will improve the operability and maintainability of the process plant and infrastructure, as well as the bringing forward of operating and capital expenditure, including the purchase of additional equipment previously intended to be hired.
Gold Road’s share of the scope changes and force majeure costs amount to A$15-million, with the company’s total share of project cost now estimated at A$284-million.
The company said on Friday that the costs would be funded from existing cash and working capital facilities.
The final cost for the project excluded the budgeted joint venture (JV) support costs, which will be shared equally between the project partners. These costs include JV management fees, amortisation of gas and power station capital costs before project commissioning and native title and community relations costs.
The JV support costs are now budgeted at around A$35-million, from the start of the project to the end of the commissioning period.
First gold from the Gruyere project remained on schedule for the June quarter of 2019, and the overall project engineering and construction was some 94% and 61% complete, respectively, with engineering, procurement and construction of the process plant and associated infrastructure some 39% complete.
The Gruyere plant will have the capacity to handle 7.5-million tonnes a year of fresh ore, and up to 8.8-million tonnes a year of oxide ore over a mine life of 13 years.