PERTH (miningweekly.com) – The economics of the Awak Mas gold project, in Indonesia, have been significantly improved following an updated to the project’s mineral resource estimate and ore reserve.
ASX-listed Nusantara Resources on Monday revealed that on the back of the increased resource and reserve estimate, the Awak Mas project is now expected to produce 1.5-million ounces over its mine life, up from the 1.1-million ounces estimated in the 2018 definitive feasibility study (DFS).
The project’s initial mine life has been extended from 11 years to 16 years, while the capacity has been maintained at 2.5-million tonnes a year. Annual average gold production has been increased slightly from 94 800 oz/y to 96 600 oz/y.
Incorporating a higher gold price than the one considered in the DFS, the project’s net present value has now increased from $152-million to $517-million, while the after-tax internal rate of return has increased from 20% to 45%.
The project’s up-front capital requirement has also increased slightly from $146-million to $156-million, while the expected all-in sustaining cost has increased from $758/oz to $875/oz.
“This outstanding economic assessment update provides a compelling case for advancing Awak Mas through the debt process towards construction development early next year,” said Nusantara MD Neil Whitaker.
The company is looking to finance Awak Mas through a combination of debt, mezzanine finance and equity, including a further investment of $25-million by PT Indika Energy in the project vehicle, which would take its ownership interest in the project to 40%.