PERTH (miningweekly.com) – Metals miner Panoramic Resources told shareholders on Friday that the company was considering its options at the Mt Henry gold project, in Western Australia, after a feasibility study proved positive.
The miner said that while the joint venture for the Mt Henry project could proceed, which would see Panoramic retain its 70% shareholding, the company was also exploring alternatives to maximise value for shareholders, including a possible initial public offering or trade sale.
Panoramic on Friday revealed that the Mt Henry mine could support an average production of 120 000 oz/y, over an initial mine life of 7.3 years, based on a maiden reserve of 922 900 oz.
The feasibility study estimated that the project would require a preproduction capital investment of A$161-million, while C1 cash costs have been estimated at an average of A$1 024/oz. However, Panoramic noted that given the current market conditions, the company was hopeful that capital and cash costs could be reduced with competitive bidding.
Over its mine life, the Mt Henry project was expected to deliver revenue of A$1.29-billion and earnings before interest, taxes, depreciation and amortisation of A$366-million. The project was also estimated to have a post-tax net present value of A$39.6-million.
The feasibility study considered a base case operation where ore would be hauled to a process plant run-of-mine pad on a continuous basis from both the Selene and Mt Henry openpits. A conventional carbon-in-leach plant with a three-million-tonne-a-year capacity would be used.
Project construction had been estimated to last some 16 months from a decision to mine.
Panoramic reported on Friday that the company had already received indicative term sheets from two Australian banks for debt financing of the projects, which indicated that a significant portion of the project’s development cost could be debt funded.
While considering the term sheets, Panoramic was also making preparations for alternative development options for the Mt Henry project.