Gascoyne Resources (ASX:GCY) has announced the results of a ‘detailed’ scoping study on its Dalgaranga project in Australia. The mine plan calls for the processing of 7.5 million tonnes of material containing roughly 330,000 ounces of gold at an average grade of 1.4 g/t.
The scoping study is built around a base case scenario with a 1.5 million tonnes per year CIL plant which should produce 60,000 ounces of gold per year at an AISC of A$1025/oz, resulting in a very handsome operating margin of in excess of A$400/oz. As the initial capex is just A$37M, the payback period will remain limited to less than two years and the after-tax IRR will very likely come in close to 50%.
The Dalgaranga project doesn’t remain limited to the initial 7.5 million tonnes, no, there’s a very realistic chance Gascoyne will be able to process a total of 14.1 million tonnes of ore which would result in a mine life of approximately 10 years, pushing the NPV of the project approximately 50% higher (our own estimate).
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Disclosure: The author holds no position in Gascoyne Resources. Please see our disclaimer for current positions.
