PERTH (miningweekly.com) – A revised feasibility study of ASX-listed Metals X’s Central Murchison gold project, in Western Australia, has delivered encouraging results, with the project now expected to require a less-intensive capital investment and have a longer mine life.
The revised feasibility study was undertaken following the acquisition of the Meekatharra gold operation as a bolt-on to the Central Murchison project in the middle of 2014.
Metals X said that the company had been re-evaluating its development strategy for the project since that time.
“The outcomes of the study and development plans are very pleasing. The initial development plan starts with a 13-year mine life, averaging gold production over the first ten years of 200 000 oz/y,” said CEO Peter Cook.
This compared with the 11-year mine life predicted in the 2013 feasibility study, with estimated gold production of 95 000 oz/y.
Cook noted that the revised feasibility study also implied a cost of production of A$1 060/oz, with the project expected to generate earnings before interest, taxes, depreciation and amortisation (Ebitda) of about A$1.31-billion, while the net present value (NPV) was estimated at A$636-million and the internal rate of return at 364%.
The 2013 feasibility study estimated that the project could deliver Ebitda of A$692-million, would have a NPV of A$141.9-million and cash operating cost of A$979/oz.
“Most importantly, and in keeping with the Metals X style, [the revised study] presents a low-cost and low-risk development option for our shareholders with a maximum cash drawdown of A$42-million and a simple buyback of 1.5 years, all of which is capable of being funded from existing cash reserves.”
The A$42-million budget for the expanded project compared with the initial A$117-million estimated for the Central Murchison project, and took into account the addition of a two-million-tonne-a-year processing plant and operational infrastructure, which was acquired through the Meekatharra purchase.
The expanded project now contains 72 separate mineral resource mining opportunities, and has a resource of about 8.5-million ounces, and a reserve of 2.05-million ounces.
Cook told shareholders on Thursday that the company intended to move the Central Murchison project through to development, with the aim of starting mining operations by the middle of 2015.