Musgrave Minerals Releases Stage 1 PFS Results for Cue Gold Project
THE DRILL SERGEANT: Musgrave Minerals (ASX: MGV) released results of a Stage 1 Prefeasibility Study (PFS) on the company’s 100 per cent-owned Cue gold project in the Murchison region of Western Australia.
Musgrave Minerals reported the outcomes of the study demonstrate the Cue project to be a technically and financially robust project.
The company explained the Stage 1 PFS Life of Mine (LOM) plan focuses predominantly on the current 417,000 ounce Indicated component of the 868,000 ounce Southern Area Mineral Resource to generate gold production of 345,000 ounces with compelling physical and economic metrics.
Musgrave indicated it would now advance to Stage 2 PFS, which is expected to extend the LOM as ongoing drilling tests new prospects and extends and upgrades existing Inferred Mineral Resources into the mine plan, within the company’s 100 per cent-owned tenure.
“The excellent Stage 1 PFS outcomes demonstrate that Musgrave’s Cue gold project is one of the highest margin, undeveloped gold projects in Australia,” Musgrave Minerals managing director Rob Waugh said in the company’s ASX announcement.
“This potential new standalone development has a rapid payback period of nine months from first processing due to the extraordinary near-surface, high-grade nature of the Break of Day and White Heat deposits.
“The project has an IRR of 95 per cent (pre-tax) and the potential to deliver over 65,000 ounces of gold annually over an initial five year period, including 80,000 ounces/year for the first three years, at an AISC of $1,315 per ounce and AIC of $1,675 per ounce (based on full amortisation of start-up capital).
“The project generates cashflow of $314 million (before tax) and an EBITDA of $528 million (at $2,600/oz) with a C1 cost of $934 per ounce.
“With this cost profile (based on Q1 2023 capital and operating cost assumptions), the project is expected to be in the lowest cost quartile of gold producers in Australia.”
“The Stage 2 PFS, is set to add mine life through the extension and conversion of existing Inferred Resources to the higher confidence Indicated category, together with the potential inclusion of newly discovered resources.”