VANCOUVER (miningweekly.com) – Alaska-focused project developer International Tower Hill Mines (ITH) has refined the project economics for its flagship Livengood gold project, improving the capital expenditure (capex) and operating expenditure (opex) estimates.

The Vancouver-headquartered company this week reported that the optimised configuration for the project, located in Fairbanks, Alaska, evaluated several scenarios, with the company ultimately selecting a plan to process 52 600 t/d and produce 6.8-million ounces of gold over 23 years. 

The improved configuration has reduced capex by 34%, or $950-million, to $1.84-billion, the process opex by 28%, or $2.97/t, to $7.48/t, and all-in sustaining costs by 16%, or $242, to $1 263/oz.

A 2013 PFS had contemplated a 100 000 t/d project, that was expected to ultimately generate only a marginal positive return, even at a gold price of $1 500/oz.

Using a new base case scenario of $1 250/oz of gold, the project returns a negative after-tax net present value (NPV) of $552-million, an after-tax internal rate of return (IRR) of 0.5% and a capex payback period of 22.07 years. At a gold price of $1 500/oz, Livengood has a calculated after-tax NPV of $165-million, an IRR of 6.2% and capital payback period of 10.7 years.

“Livengood’s fundamentals are compelling, with a substantial gold resource, favourable jurisdiction, proximity to infrastructure and great leverage to the gold price. We are committed to advancing our basic engineering and metallurgical work to further de-risk the project and prepare for future permitting,” CEO Tom Irwin stated.

The project has a measured and indicated resource of 525.38-million tonnes grading 0.68 g/t, for 11.5-million ounces, while the inferred resource stands at 52.8-million tonnes grading 0.66 g/t for 1.13-million ounces.

Investors were not impressed with the updated report, resulting in ITH’s TSX-listed stock dropping 4% on Thursday, and a further 6.5% on Friday to C$1.15 apiece.

ITH advised that results to date indicate that further work is warranted to continue optimising the project, such as improved resource modelling that could potentially enhance head grades and result in improvements to the mine plan to further reduce capex and opex.

The metallurgical tests completed to date indicate that there are further opportunities to improve overall gold recovery. Subject to available financing, work will continue to optimise flowsheet and reagent consumption to maximise recovery, confirm the grind/recovery relationships, refine the process opex and, thereby, further de-risk the project.

The company will also continue to advance environmental baseline work in support of future permitting to better position the project for a construction decision when warranted by market conditions.