Analytics platform Stormlands Mining finds in its latest case study that the net present value (NPV) of the Illinois Creek gold project, in Alaska, can increase from $226-million to $448-million using current commodity prices for economic modelling.

Using project owner Alaska Silver's available technical data, Stormlands rebuilt a base case financial model for the project that finds an internal rate of return (IRR) of 36.8% and a payback period of two years and seven months using conservative gold pricing.

The model also finds potential life-of-mine (LoM) revenue of $1.15-billion and earnings of $805-million over a 10.2-year mine life, for a capital requirement of $150-million - also under the base case assumptions.

The analytics company then updated the model using the average March gold price of $4 877/oz, while keeping all other core assumptions, and found that the NPV increases to $448-million, or by 98% compared with the base case scenario. The IRR increases to 61.4% and the payback reduces to one year and seven months.

This represents an uplift of about $648-million, or 140%, compared with the base case scenario.

In the current commodity price scenario, LoM revenue increases to $1.69-billion, while earnings increase to $1.32-billion.

The Stormlands model shows Illinois Creek as a gold-led project, with silver providing a meaningful secondary contribution.

Stormlands Mining CEO Róisín O’Connell highlights the importance of structured mining data, commenting that the Illinois Creek mineral resource estimate provides a strong technical foundation and a project-level economic model. Illinois Creek has not yet progressed to have a feasibility, prefeasibility or preliminary economic assessment (PEA).

"The case study demonstrates how a technical report with no published economic analysis can be converted into a scenario-driven valuation model. It allows users to ask practical economic questions before a formal PEA is available in order to understand the value drivers that influence the project economics," O'Connell says.