PERTH (miningweekly.com) – The definitive feasibility study (DFS) into a heap leach strategy at ASX-listed Phoenix Gold’s Castle Hill operation, in Western Australia, has proven positive, the company reported on Wednesday.

The DFS assumed a standalone two-million-tonne-a-year heap leach processing facility at Castle Hill, with ore sourced from the lower-grade stockpiles mined from the Mick Adams-Kiora, Wadi, Kingore, Castle Hill Stage 3, and Burgundy openpits.

The Mick Adams-Kiora and Wadi projects were currently the subject of a licence to mine and ore sales agreement negotiations with fellow-listed Norton Gold Fields, under which Norton would mine the project, and haul high-grade ore to its Paddington mill for processing.

The lower-grade ore would be stockpiled separately and would be available for heap leaching.

The heap leach operation was expected to require a capital investment of about A$34.41-million, and would deliver 191 900 oz of gold over a seven year mine life, at an average production rate of 27 000 oz/y.

The heap leach operation was expected to generate revenue of A$287.8-million, have a net present value of A$40.6-million and an internal rate of return of 45%.

“This DFS supports heap leaching of lower-grade material mined and stockpiled from our core projects and has always been a key part of our strategy. The results of this study clearly demonstrate strong economic returns at current gold prices,” said Phoenix Gold MD Jon Price.

Phoenix Gold acquired the two-million-tonne heap-leaching plant from St Ives gold mine in July last year, for A$2-million.

The relocation, refurbishment and recommissioning of the plant, and the construction of the heap leach pads were expected to take between 12 and 15 months to complete.

“We now look forward to finalising project funding and progressing towards starting the relocation, refurbishment and recommissioning of the recently acquired plant, together with the construction of the heap leach pads and associated infrastructure,” Price said.