Photo by: Romarco Minerals
TORONTO (miningweekly.com) – After recently receiving all necessary permits to start construction of its flagship Haile gold project, in South Carolina, Canadian project developer Romarco Minerals late Wednesday reported that it had updated the project’s economics, resulting in a 72% boost to the project’s after-tax net present value (NPV).
Toronto-based Romarco said the updated report was based on the company’s previous February 2011 feasibility study, but given the passage of time from the original economic analysis, the company undertook confirmatory work on the project economics.
Using a 5% discount rate, the after-tax NPV rose from $191-million to $329-million and the internal rate of return increased from 15.7% to 20.1%.
While most economic metrics remained constant, the assumed gold price was adjusted higher to $1 250/oz, up from $950/oz.
The initial cost of the project rose to $333-million, including a $17-million contingency, of which $31-million had already been paid. This was higher when compared with the initial capital estimate of $275-million, including $30-million for contingency.
Romarco said the increase in capital was mainly owing to bringing forward some work that was previously projected to be sustaining capital, increased insurance amounts, refinements in the detailed engineering, which was now 85% complete, additional capital affiliated with permit requirements and increases in materials costs.
The project’s sustaining capital was currently expected to be $139-million compared with $119-million in the feasibility study. The bulk of the sustaining capital costs were for earthworks associated with tailings and overburden stockpile construction, where unit rates for material moved had increased.
Updated operating costs were $23.79/t of ore processed and $476.94/oz produced, including refining costs and net of silver by-product credit. These costs represented a 26% increase from the feasibility study, owing to increased costs for labour and consumables and an increase in power (initial rate of $0.05/kWh).
The Haile gold project had compliant measured and indicated gold resources of 71.2-million tonnes at 1.77 g/t of gold, as well as an inferred gold resource of 20.1-million tonnes at 1.24 g/t of gold.
Proven and probable gold reserves were estimated at 30.5-million tonnes at 2.06 g/t.
Cutoff grades for the mineral resource calculation were unchanged at 0.41 g/t for the openpit and 2.74 g/t for the underground and the mineral reserve cutoff grade was unchanged at 0.48 g/t.
The 7 000 t/d plant was now expected to recover more silver at 70%, up from a 50% recovery rate. Gold recovery remained unchanged.
All-in sustaining costs an ounce of gold produced for the Haile project based on the updated technical report were $624/oz of gold produced.
Fort Mill, South Carolina-based Romarco had early last month secured a binding commitment letter with a consortium of financiers for a $200-million, 8.5-year senior-secured project finance facility, a week after obtaining a federal permit under Section 404 of the Clean Water Act for the Haile project.