The long-awaited McPhillamys project, in New South Wales, will require about A$1-billion before it produces its first gold, owner Regis Resources said on Wednesday.
In a definitive feasibility study (DFS) update, the company reported a total construction cost estimate of between A$845-million and A$900-million, and preproduction costs of about A$115-million to A$155-million.
Regis’ last cost estimate for McPhillamys was in the 2017 prefeasiblity study, which pegged capital expenditure at A$215-million.
“The general cost inflation seen globally for construction and permitting required scope increases have clearly escalated costs for McPhillamys,” said MD Jim Beyer.
McPhillamys is a key part of Regis' future growth. The project aims to develop a seven-million-tonne-a-year operation, producing up to 200 000 oz/y of gold over a 10- to 15-year mine life.
Beyer stressed that Regis was taking the necessary time to reduce, as far as possible, the capital required to bring McPhillamys into production through value engineering optimisation.
Regis expects the DFS to be completed by the end of the 2024 financial year in June. The application to New South Wales for a modification to approval conditions, to incorporate scope changes, will take about seven to ten months.