PERTH (miningweekly.com) – A revised bankable feasibility study into the Yandal gold project, in Western Australia, has estimated that a capital injection of A$42-million will be required to bring the project into production.
The BFS is based in the refurbishment of ASX-listed Echo Resources’ Bronzewing processing plant and substantial associated infrastructure, with ore to be sourced from the Stage 1 openpits at Orelia and Julius for a projected four-year mine life.
The Stage 1 operation is expected to produce 378 874 oz of gold at an average production of 95 000 oz/y, with life-of-mine all-in sustaining costs estimated at A$1 095/oz.
The project is estimated to have a pre-tax net present value (NPV) of A$172-million and an internal rate of return (IRR) of 198%, with pre-tax project free cashflow projected at A$225-million.
This was up from the original BFS’ NPV estimate of A$141-million, and IRR of 168%, and free cash flow projections of A$184-million.
Echo on Tuesday told shareholders that for conservatism, the additional four years of mine life from the Stage 2 ore reserves, which comprise some 408 000 oz, have not been included in the BFS, and these reserves will be augmented over time, and could result in a mine life extension.
“The BFS highlights the profitability and rapid payback of the project. We now have an advanced, development ready project which we expect to generate attractive returns for our shareholders,” said Echo MD Victor Rajasooriar.
“The board remains committed to overseeing a low-risk, measured transition to old production at the Yandal gold project to ensure long-term shareholder value. As such, a number of near-term activities are being pursued with the potential to further improve the project’s returns and continue to de-risk any decision to mine.”
The activities included further investment in resource conversion and advanced exploration activities across the company’s 1 600 km2 tenement package, which Rajasooriar said had already yielded four-million ounces of gold production and which contains a number of highly prospective areas that have lacked systematic exploration.
“This exploration strategy, combined with discussions regarding regional asset and corporation consolidation, has the potential to create and expose our shareholders to a multi-mine business producing well in excess of 100 000 oz/y.”