PERTH (miningweekly.com) – A scoping study into the Ulysses gold project, in Western Australia, has found that an underground operation could produce about 358 000 oz over a four-year, with the project’s capital expenditure estimated at A$84.4-million.

ASX-listed Genesis Minerals said on Friday that the scoping study was based on a mineral resource of 3.01-million tonnes, grading 4.1 g/t gold for 400 000 oz fully diluted.

The scoping study considered a production rate of some 800 000 t/y to 900 000 t/y to be the optimum development scenario for the project, producing the best capital and operating efficiencies.

Gold production in the first year is expected to reach 41 000 oz, and will peak at 118 000 oz in the third year of operation.

All-in sustaining costs for the project are forecast to be between A$1 000/oz and A$1 100/oz.

Genesis MD Michael Fowler told shareholders that the scoping study results provided a clear indication of the inherent value proposition at Ulysses, as well as the substantial potential to further enhance the project with ongoing drilling to grow the resource and make new discoveries.

“The scoping study results, using reasonable assumptions, are highly encouraging. The project currently shows a four-year underground mine life, but there is a clear potential for significantly increased cash flow through increased mine life, which we expect to achieve through ongoing drilling programmes and future exploration success.”

Fowler said that Genesis’ strategy for unlocking the value at Ulysses had two key elements, the first of which was to continue drilling and exploration to grow the mineral resource inventory, both in areas close to the proposed underground infrastructure and further afield within the company’s tenements.

Secondly, Genesis would progress feasibility studies based on a new stand-alone gold mine development, with the overall objective of delivering a detailed feasibility study by the end of next year.

“In the meantime, shareholders can look forward to strong news flow as we continue to drill aggressively and deliver results from outside the current resource inventory.

“At this stage, we expect to be able to update the mineral resource again by the end of the second quarter of 2019, and then potentially again later in the year, as the foundation for the ongoing feasibility study.

“We expect any additional ounces to add significant value in terms of reducing costs and increasing cash flows.”