PERTH (miningweekly.com) – The Phase 2 scoping study into the Estelle gold project, in Alaska, has estimated that the project will require a capital investment of $385-million.

Junior Nova Minerals on Monday announced that the project would have a pre-tax net present value of $654-million and an internal rate of return (IRR) of 53%, with an all-in sustaining cost (AISC) of $510/oz in the first year of production and $1 149/oz over the life-of-mine (LoM).

In the first year, Estelle is expected to produce 363 000 oz, with the project averaging 132 000 oz/y over its 17-year mine life to produce a total of 2.25-million ounces. The scoping study included only three of the four resource deposits currently defined within the Estelle project, with the 2.01-million-ounce inferred resource at the Cathedral deposit not included in the study.

The Phase 2 scoping study increased the mine life by two years, compared with the previously completed Phase 1’s 15 year estimate, and has increased yearly gold production estimates from the 1 956 oz/y considered in the Phase 1 scoping study.

The Phase 1 scoping study had estimated a pre-production capital cost of $424-million to develop the project, with LoM AISC having previously been estimated at $1 120/oz.

“Completion of the Phase 2 scoping study marks a major milestone for the company, providing a robust foundation as we move towards the PFS, and exceeded our expectations in many regards with a from-surface high-grade starter pit at RPM offering a quick 11-month payback period and a 53% IRR that we aim to continue to improve with further optimization,” said Nova CEO Christopher Gerteisen.

“With such a positive outcome and baseline to work from, we are now targeting additional near surface mineable resources to increase the average LoM mill feed grade, where the slightest increase should improve the project’s economic metrics. We have those resource targets ready to drill this year, particularly at RPM. It’s all upside from here.”

Gerteisen said that with the project now essentially de-risked from a capital perspective with the 11-month pay-back period, Nova can be viewed as having a two-tier upside; development, and most importantly exploration, as any new discoveries and increases to the resource base will now go straight to the bottom line improving the project's economic metrics.