VANCOUVER (miningweekly.com) – Gold project developer International Tower Hill Mines (ITH) has corrected the reported all-in sustaining costs (AISC) metric for its Livengood project, near Fairbanks, Alaska, downwards by nearly 23% to conform with World Gold Council (WGC) guidance.
The Vancouver-based company on Thursday said the effect of the error was to overstate AISC at $1 263/oz, while the corrected figure should be $976/oz.
ITH explained that, contrary to WGC guidance, both initial capital costs and mining and income taxes had been included in the previously reported estimated AISC of $1 263/oz.
The company reported the results of a prefeasibility study (PFS) in September, opting for a base case mine plan to process 52 600 t/d and produce 6.8-million ounces of gold over 23 years.
The improved configuration has reduced capital expenditure (capex) by 34%, or $950-million, to $1.84-billion, the process operating expenditures by 28%, or $2.97/t, to $7.48/t, and AISC by 16%, or $242.
A 2013 PFS had contemplated a 100 000 t/d project, that was expected to ultimately generate only a marginal positive return, even at a gold price of $1 500/oz.
Using a new base case scenario of $1 250/oz of gold, the project returns a negative after-tax net present value (NPV) of $552-million, an after-tax internal rate of return (IRR) of 0.5% and a capex payback period of 22.07 years. At a gold price of $1 500/oz, Livengood has a calculated after-tax NPV of $165-million, an IRR of 6.2% and capital payback period of 10.7 years.
The project has a measured and indicated resource of 525.38-million tonnes grading 0.68 g/t, for 11.5-million ounces, while the inferred resource stands at 52.8-million tonnes grading 0.66 g/t for 1.13-million ounces.