KALGOORLIE (miningweekly.com) – Gold miner Regis Resources is working towards becoming a 500 000 oz/y producer by the 2027 financial year, with the miner poised to take a final investment decision on its McPhillamys project, in New South Wales, by the June quarter of 2024.

A 2017 prefeasibility study into the project estimated a capital cost of A$215-million to develop the seven-million-tonne-a-year operation. Based on a mineral resource estimate of 2.3-million ounces and an ore reserve of two-million ounces, the project is expected to produce up to 200 000 oz/y of gold over a mine life of between 10 and 15 years.

Regis MD and CEO Jim Beyer told Mining Weekly Online that the capital cost for McPhillamys would be significantly higher than estimated in 2017.

“I have said on a number of occasions that the capital now is much more than that, we are anticipating it to be in the region of A$500-million to A$600-million,” Beyer said on the sidelines of Diggers & Dealers.

“There is a 90-km water pipeline that will need building and that alone will cost A$100-million. It is a big project, and in New South Wales, and the location we are in, it requires a lot of extra water management systems,” Beyer said.

“But it is a good project and we are looking forward to getting it to that point.”

Construction is expected to take two years to complete, and Regis is looking at funding the project from cashflows from existing operations, as well as some debt.

“Our cash generating capacity has been severely hampered by the hedge book that we have been working our way through, and once we are clear of it, it puts an additional A$165-million year-on-year in our cashflow straight away.”

The New South Wales Independent Planning Commission (IPC) recently gave final approval for the development of McPhillamys, marking an important milestone in mining approvals.