PERTH (miningweekly.com) – An updated scoping study into junior gold developer A1 Consolidated Gold’s namesake project, in Victoria, has reduced the projected all-in sustaining costs (AISCs) while improving the project’s economics.

The upgraded scoping study was prepared on the assumption that the November acquisition of fellow-listed Octagonal Resources’ Victorian assets was completed.

The assets to be acquired included a fully permitted 150 000 t/y treatment facility, which would complement the company’s planned production at the A1 gold mine.

A September scoping study had estimated that Stage 1 of the A1 gold project would require preproduction capital expenditure of A$2.9-million, to deliver about 378 000 t of gold, grading 6.52 g/t gold over three years.

While the upgraded scoping study has maintained the parameters, the project’s net present value had now increased from A$23.2-million to A$27.2-million, while the internal rate of return had increased from 62% to 94%.

AISCs have also decreased from A$860/oz to A$849/oz.

With the acquisition of Octagonal’s Victorian assets, mill recoveries also increased from 80% to 90%, while total mining costs increased from A$144/t to A$162/t.

A1 told shareholders on Tuesday that the updated scoping study for the Stage 1 operation formed the basis of the company’s ongoing mine plans, and to assess the company’s financial requirements to move into production.

Meanwhile, A1 noted that both the company and Octagonal have been working to satisfy the conditions precedent to the assets sales agreement, with a shareholder meeting expected to be called in late March, to vote on the transaction.

In exchange for the Maldon gold project, Octagonal would receive A$5.1-million in A1 Gold shares, with the shares priced at 3c each, as well as 1:3 listed A1 Gold options that would vest three months after the completion of the transaction and would have a five-year life, as well as a board position on the A1 Gold board.