Gascoyne Resources (ASX:GCY) has released the results of its pre-feasibility study at the Dalgaranga project in Western Australia. This study was released a few months ago, and as the gold price in Australian Dollar is now quite a bit higher than what has been used in the pre-feas (A$1700+ versus A$1600 in the PFS), we wanted to have another close look at this PFS.
The initial capex is expected to be just A$75M and as the anticipated payback period is less than 12 months, it’s not really a surprise to see an Internal Rate of Return of 90% (and this will very likely be 100% if you’d use the current gold spot price). The NPV8% is approximately A$193M which seems to be quite ‘low’, but you shouldn’t forget the mine plan is based on less than 550,000 ounces of gold from the 1.05 million in the total resource estimate.
The economics seem to be pretty strong so it’s not really a huge shock to see Gascoyne has immediately started a feasibility study which should be ready by the end of this year.
Go to Gascoyne’s website
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