PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Bardoc gold project, in Western Australia, has forecast average yearly production of 135 000 oz at an all-in sustaining cost of A$1 220/oz.
ASX-listed Bardoc Gold has reported that the project would require a capital investment of A$142.4-million, which would be paid back over a 32-month period from the start of production.
The PFS estimated a pre-tax net present value of A$332-million and an internal rate of return of 32%, based on a gold price of A$2 100/oz, while life-of-mine pre-tax cash flows have been estimated at A$551-million over a seven-year mine life.
“The strong PFS outcomes demonstrate that the Bardoc gold project is one of the best undeveloped gold projects in the Eastern Goldfields, with the potential to deliver an average of 135 000 oz/y over a seven-year production period, peaking at 170 000 oz in year five,” said Bardoc CEO Robert Ryan.
He noted that at an assumed base case gold price of A$2 100/oz, well below the current spot prices, the project would deliver robust margins and generate strong cash flows.
“Our project development strategy is underpinned by the construction of an on-site 1.8-million tonne a year capacity carbon-in-leach plant incorporating a flotation circuit capable of producing a gold concentrate for sale to international markets.
“A forecast pre-production capital investment of A$142.4-million and a 32-month capital payback makes this a financially attractive proposition,” Ryan said, noting that at the current spot prices of around A$2 530/oz, the project’s pre-tax net present value increased to A$600-million while the internal rate of return increased to 55%.
“There is substantial upside to our base case PFS numbers with strong potential to grow the one-million-ounce mine plan within the current three-million-ounce resource. In addition, with a significant exploration programme planned over the coming months and a strong balance sheet, we are confident of growing the global resource, building on the recent drilling successes at Mayday North, El Dorado and North Kanowna Star deposits.”
Ryan noted that the definition of a 789 000 oz maiden ore reserve also indicated the financial viability of the project, with 77% of the mining plan underpinned by the ore reserve and 80% by measured and indicated resources.
“The focus of our ongoing drilling will be to in-fill and updgrade a portion of the inferred resource to the indicated category, so they become available for conversion to ore reserves, also to grow our overall mineral resource base, and to commence mining evaluations of the key satellite deposits.
“Given the already strong economics of the PFS our focus will now be to optimise the project in terms of reserves, mining inventory, production levels, operating costs and financial returns in order to deliver the best possible return to shareholders.”