VANCOUVER (miningweekly.com) – TSX- and Aim-listed Dalradian Resources has published the results of a feasibility study on its Curraghinalt gold project, in Northern Ireland, demonstrating a strong economic case for the 100%-owned project.
Completed by international consulting engineering firm JDS Energy & Mining, the feasibility study calculated an after-tax net present value (NPV), at a 5% discount rate, of $301-million, and an internal rate of return (IRR) of 24.4% at an assumed gold price of $1 250/oz.
"The feasibility study outlines a project with high expected profitability and returns and demonstrates the strong economic case for advancing Curraghinalt to development. One of the project's main competitive strengths is the high reserve grade, which would place it in the top 10% of gold mines worldwide. What is also very encouraging is that there are multiple opportunities to enhance the economics and extend the project life,” stated Dalradian president and CEO Patrick Anderson.
The feasibility study is based on Curraghinalt’s proven and probable reserves of 1.44-million ounces of gold and 660 000 oz of silver, held in 5.24-million tonnes grading 8.54 g/t gold and 3.9 g/t silver. Measured and indicated resources stand at 2.1-million ounces gold contained in 5.61-million tonnes grading 11.61 g/t gold.
Importantly, the feasibility assessment excluded the significant inferred resource of 2.31-million ounces gold, contained in a further 7.13-million tonnes grading 10.06 g/t gold.
Over the initial ten-and-a-half years life-of-mine (LoM), Dalradian expects to produce 1.36-million ounces of gold and 380 000 oz silver, using an average overall gold recovery of 94.3%.
The operation will produce gold at a rate of 130 000 oz/y in the first ten years, with an average LoM total cash cost of $556/oz and a LoM all-in sustaining cash cost of $674/oz.
The project can be built for $192-million, with a capital payback of four years.
Dalradian points out that, at year five, production increases above 150 000 oz/y, with peak production achieved in year seven, at 170 000 oz. There is potential to maintain this higher rate of output beyond year seven with the conversion of existing inferred resources.
Curraghinalt will be operated using automation and mechanised underground mining methods, as well as best-in-class processing. The dry stack tailings from the process will not come into contact with cyanide.
“We are particularly pleased that our test-mining showed the viability of mechanised underground mining methods for this deposit and returned consistently higher grades than those predicted by the resource model. The feasibility study sensitivities demonstrate considerable potential for grade upside, such that a 20% grade improvement increases after-tax NPV by 64% and after-tax IRR by 39%,” said Anderson.