THE BOURSE WHISPERER: White Rock Minerals has completed a scoping study on the Mt Carrington gold-silver project in northern New South Wales.
The company said the results of the study have confirmed the potential for a medium‐scale low cost production profile of 40,000 ounces of gold equivalent per annum with strong financial returns.
This is based on an estimated capital expenditure of $24 million and short payback timeframe of less than 18 months.
White Rock consider the results support its vision of accelerating the development of a gold‐silver operation at Mt Carrington in the next 18 months, subject to continued positive results from feasibility studies.
“We are extremely pleased with the results of the Scoping Study for Mt Carrington, and it provides confidence that we have the right ingredients for an attractive and financially robust silver‐gold project,” White Rock Minerals managing director Geoff Lowe said in the company’s announcement to the Australian Securities Exchange.
“We have the advantages of mining leases with infrastructure already in place which underpins a modest capital expenditure estimate.
“The current Resource base is amenable to open pit mining, and sighter metallurgical test work has provided a number of viable processing routes.
“We will now look to undertake a definitive feasibility study next year, and subject to further positive results, press the button on development during 2013 with the aim of production in early 2014.”
Mt Carrington Resource summary. Source: Company announcement
Highlights of the study include:
– Proposed initial development – 40,000 ounces of gold equivalent per year at $869 per ounce cash cost;
– Capital Costs of $24 million (processing plant and mine infrastructure);
– Undiscounted project value of $68M ($97M pre‐tax);
– $40M Net Present Value at a 10 per cent discount rate ($60M NPV pre‐tax);
– Internal Rate of Return of 67 per cent (92 per cent pre‐tax);
– Capital payback within 18 months;
– Six year open pit mining operation with production of 107,000 ounces gold and 6.9 million ounces silver;
– 0.8 million tonnes per annum floatation and CIL circuit to produce silver‐gold concentrate and bullion;
– Overall 85 per cent recovery for all deposits; and
– Average open pit strip ratio of 2.4 : 1.
“The Scoping Study results provide a very healthy starting point for a new operation, but we believe it is just that – the starting point,” Lowe continued.
“The Drake Volcanic Caldera represents one of the most under‐explored volcanic belts in Eastern Australia and we will look to accelerate the district exploration program to build a Resource base that supports a sustainable, long term 100,000 ounce per annum gold equivalent production profile.
“The recent drilling success reported at the Mozart, Red Rock and Junction prospects highlights the quality of the target portfolio and increases the likelihood of future Resource additions.”