PERTH (miningweekly.com) – An updated definitive feasibility study (DFS) into ASX-listed Mutiny Gold’s Deflector project, in Western Australia, has reduced the projected start-up capital requirements by some 32%.

The junior said on Monday that the updated DFS had decreased capital estimates for the project to some A$62-million, while maintaining production output at some 80 000 oz/y over the life of the mine.

Based on the current commodity prices, the updated DFS estimated that the project would have a net profit after tax of A$180-million and a net present value of A$100-million.

“This update shows Deflector is high-grade, low-cost and extremely robust. The scale of production will elevate Mutiny to a midtier, low-cost producer while operating in a stable geopolitical region,” said Mutiny MD John Greeve.

He noted that the cost reduction was achieved by rescheduling mining activities for the openpit, thereby reducing preproduction mining from six months to three months, while maintaining sufficient stockpiles for process plant start-up.

Further capital reduction was achieved by leasing an existing camp rather than the immediate expansion of the on-site camp, and by using a contract crusher rather than building a new crushing circuit. The updated DFS also considered removing the tails thickener from the engineering scope of work.

The combined strategies reduced the capital cost from A$91-million to A$62-million.

Greeve said that while some operating cost centres would be affected by the capital cost strategy, overall operating costs have been maintained at industry-low levels on a cost-per-ounce basis. The project was expected to have an all-in sustaining cost of A$801/oz.

He added that the low operating costs were owing to the high gold grade, excellent mining conditions, increased schedule efficiencies and the reducing mining operating costs, which was in line with changes in industry rates and market conditions.

Meanwhile, the updated DFS also identified an opportunity to increase plant throughput to take advantage of the resource potential upside and the underground mining contractor’s ability to increase production rates.

Under this opportunity, a Stage 1 mill upgrade would incorporate the installation of a second ball mill and additional float cells during the third year of production, allowing underground production to ramp up to 480 000 t/y from 380 000 t/y.

The Stage 1 upgrade would increase production rates in the second half of the project life from an average 68 000 oz/y to some 88 000 oz/y.

If future drilling is successful and the target resource of 1.5-million ounces achieved, Mutiny will look to implement a Stage 2 upgrade to lift underground production further to 800 000 t/y.

This would increase gold production from 88 000 oz/y to 150 000 oz/y.

The Stage 2 upgrade would incorporate a second decline at Deflector and a plant upgrade to allow for the extra production. Initial cost estimates have placed a A$31-million price tag on this plant upgrade.

“The expansion programme is a preferred option in the near-term, with further expansions planned to follow successful drilling campaigns,” said Greeve.

“With the significant prospectivity available to us at Deflector, we can see that further drilling success along strike and down dip will be the catalyst to activate this plan. Mutiny has a proven exploration success record at Deflector and we are confident in our target range,” he added.