Doray to launch BFS after receipt of Scoping Study

OUT AND ABOUT: Doray Minerals has completed a preliminary economic assessment of the company’s 80 per cent-owned Andy Well gold project, located approximately 45 kilometres north of Meekatharra, in the Murchison region of Western Australia.

Doray said the assessment has confirmed the Andy Well project’s economic viability and its ability to deliver significant positive cashflows.

The study consisted of mining, geotechnical, metallurgical, processing, infrastructure, environmental and financial analyses, which used the December 2011 Wilber Lode resource as a base-case scenario.

The study did not include increases to the total Andy Well gold resource that have been made through extensions to the Wilber Lode deposit and/or additional discoveries.

“Over the last six to nine months we have been doing some internal modelling and we looked at a number of mining and processing options and basically came up with a small open pit with the majority of the deposit being mined underground,” Doray Minerals managing director told the Paydirt Gold Conference in Perth.

“We have settled on a 150,000 tonne standalone gravity and CIL plant, based on site.

Kelly highlighted the key parameters from the scoping study to be a 100,000 tonnes per annum mill, a diluted head grade processing at around 12.3 grams using a metallurgy recovery of around 96.5 per cent, which gives the company a mine life of between four to four and a half years with its current resource.

“We are looking at a start-up capex, including the camp and the plant and other site infrastructure of around $5 million and operating costs per ounce, due to the high-grade and simple recovery, of around $500 an ounce,” Kelly said.

“After looking at various mining and processing options, the study concluded a standalone operation starting as a small open pit followed by a mechanised narrow vein underground mine, with ore processed on-site via a gravity and CIL plant, would be the optimal scenario for the company to adopt.”

Using an assumed gold price of $1600, Doray said the study demonstrated attractive operating margins with potential operating costs in the range of $500 to $600 per ounce, producing a cash surplus (after payment of royalties) of $135 million, an IRR of 79 per cent and an NPV of $106 million (using a discount rate of 8 per cent).

The study highlighted Doray’s potential to repay capital expenditure within 18 months of commencing production from its current resource base.

The company has now committed to complete of a Bankable Feasibility Study.