Resource upgrade boosts K2 economics – Ord River
PERTH (miningweekly.com) – Gold developer Ord River Resources has reported improved economics at the proposed K2 underground gold project, in Western Australia, following an increase in the project’s resource estimate.
Earlier this month, Ord River reported a 28% increase in the resource at the K2 deposit, which forms part of the greater Plutonic Dome gold project. The K2 deposit was now estimated to contain some 103 000 oz of gold.
The ASX-listed junior said on Wednesday that the recent resource upgrade had increased the project’s economics, with the K2 underground mine’s pretax net present value estimated at about A$14.87-million, a 78% increase on the A$8.3-million estimated in the definitive feasibility study completed earlier this year.
The internal rate of return had also increased from 161% to 229%, while C1 cash cost estimates had decreased from A$841/oz to A$791/oz. All-in sustaining costs had declined from A$208/oz to A$206/oz.
Meanwhile, head grade had slightly improved from 6.4 g/t of gold to 6.9 g/t of gold, with the mined tonnes also increasing by 22%, to deliver a 46% increase in recoverable ounces, from 37 000 oz to 54 000 oz.
The project was expected to generate revenue of about A$68.7-million and would require a capital investment of A$10-million.
Ord River reported on Wednesday that the permitting for the K2 project was well advanced, with the mining proposal lodged with the Department of Mines and Petroleum.
Ord River recently signed an ore treatment agreement with fellow-listed gold miner Northern Star Resources which would facilitate the processing of ore from the K2 underground development project at Northern Star’s Plutonic processing facility.
Northern Star would be paid for the processing services through the provision of gold at the point of refining, Ord River said.
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