Mount Magnet South ups economics at Kirkalocka
PERTH (miningweekly.com) – An optimised feasibility study of ASX-listed junior Mount Magnet South’s Kirkalocka gold project has not only increased the project economics but also the expected mine life.
The project was initially expected to deliver some 50 000 oz/y over a mine life of around five years, but the optimised feasibility study projected that yearly metal production could increase significantly in the first three years of operation, ranging from 62 000 oz/y to 75 000 oz/y.
First year metal production has been targeted at 68 000 oz/y.
The optimised feasibility study was based on the development of an opencut mining operation, using a conventional carbon-in-leach processing plant, able to process between 1.6-million and 2.2-million tons of ore a year.
The optimised plan has incrementally increased the expected capital cost of the project from A$29-million to A$31.2-million, but the net preent value of the project has also improved to A$67.4-million, at a gold price of A$1 500/oz, while the internal rate of return increased to 70%.
Mount Magnet told shareholders on Thursday that it had mandated a leading global investment banking firm to provide project loan and gold hedging facilities for the Kirkalocka project development.
The due diligence and loan documentation were proceeding on schedule and would likely be competed by the second quarter of this year.
Meanwhile, Mount Magnet also continued to identify project enhancements to further improve the project’s financial results, including ongoing exploration work.
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