Scoping Study
Scoping Study
Based on a proposed 1.2 Mtpa standalone mining and processing operation, the Scoping Study has demonstrated potentially strong financial metrics for the Cape Ray Gold Project (Table 1).
The preliminary economics indicate the Project has positive financial metrics over an initial mine life of 7 years with capital payback during the first 1.75 years of the Project’s life. This decreases to 1.5 years based on the current gold spot price of US$1,700. The first year of production includes a 6-month ramp up to full throughput capacity.
Table 1 below provides an indication of the sensitivities on the Project’s economics highlighting the NPV and IRR.
Table 1: NPV and IRR Valuations
| Scoping Study - 100% equity – Pre-tax | NPV (C$) | NPV (A$) | IRR |
| 5% | $300 | $344 | 61% |
| 8% | $256 | $295 | |
| 10% | $231 | $266 | |
| Scoping Study - 100% equity – Post-tax | NPV (C$) | NPV (A$) | IRR |
| 5% | $196 | $226 | 51% |
| 8% | $168 | $194 | |
| 10% | $152 | $174 |
Table 2 below highlights the key input assumptions
Table 2: Base Case – Summary of Projects Economics (estimated)
| Post-Tax Financial output | LOM total / Avg. |
| NPV (8%) (A$ m) | 194 |
| NPV (8%) (C$ m) | 168 |
| IRR (%) | 51 |
| Payback (Years) | 1.75 |
| Undiscounted Cumulative Cashflow (C$ m) | 253 |
| Pre-Tax Financial output | LOM total / Avg. |
| NPV (8%) (A$ m) | 295 |
| NPV (8%) (C$ m) | 256 |
| IRR (%) | 61 |
| Undiscounted Cumulative Cashflow (C$ m) | 583 |
| Financial Inputs | LOM total / Avg. |
| Gold Price (US$/ oz) | 1550 |
| Silver Price (US$/ oz) | 18 |
| Exchange rate (US$: C$) | 0.7 |
| Exchange rate (C$: A$) | 0.87 |
| General | LOM total / Avg. |
| Mine Life (Yrs) | 7 |
| Ramp up period (Yrs) | 0.5 |
| Processing Facility Throughput (Mt) | 1.2 |
| Total Ore Mined (Mt) | 7.8 |
| Total Material Mined (Mt) | 92.7 |
| Strip Ratio (Operational) | 9.6 |
| Total Gold Mined (Au koz) | 504 |
| Production | LOM total / Avg. |
| Mill Head Grade (Au g/t) | 2 |
| Au Mill Recovery (%) | 0.96 |
| Mill Head Grade (Ag g/t) | 6.13 |
| Ag Mill Recovery (%) | 0.56 |
| Av. Annual Production (1-4) (Au koz) | 88 |
| LOM Production (Au koz) | 483 |
| Operating costs | LOM total / Avg. |
| Mining Costs - OP (C$ / t mined) | 2.8 |
| Mining Costs - UG (C$ / t mined) | 90 |
| Processing Costs (C$ / t processed) | 21.35 |
| G&A Costs (C$ / t processed) | 4.94 |
| Royalty rate (%) | 1.9 |
| C1 Cash costs (C$ / oz) | 1013 |
| C1 Cash costs (US$ / oz) | 709 |
| AISC (C$ / oz) | 1108 |
| AISC (US$ / oz) | 776 |
| Capital costs | LOM total / Avg. |
| Initial Capital (exc. Mine Development) (C$ m) | 136.7 |
| Mine Development (Initial) (C$ m) | 8.7 |
| Mine Development – OP (Sustaining) (C$ m) | 28.2 |
| Mine Development – UG (C$ m) | 12.2 |
| Other Sustaining Capital (C$ m) | 6.9 |
Full details of the Study can be accessed by clicking the link below.
https://www.investi.com.au/api/announcements/mzz/4338dd64-18a.pdf