Golden Cross Resources (ASX:GCR) has released the results of a resource calculation at its Copper Hill copper-gold project in Australia. Using a cutoff grade of 0.20% copper, the total estimate stands at 87 million tonnes of ore at an average grade of 0.36% copper and 0.32 g/t gold for a total of almost 700 million pounds of copper and 890,000 ounces of gold.
If you’d apply a higher cutoff grade of 0.4% Cu, the project would still contain 350 million pounds of copper and almost half a million ounces of gold at an average grade of 0.56% Cu and 0.53 g/t gold. This would result in a rock value of $55/t which is pretty decent for an open pit operation and we originally thought Golden Cross would be able to pull it off to use a lower cutoff grade, but it doesn’t look like the company will be able to use a cutoff grade below 0.3% Cu.
Golden Cross’ scoping study indicated a 3Mtpa plant could be built for less than A$175M and would process ore at a total cost per tonne of A$28 (US$22/t). If we’d use the resource estimate based on a 0.3% Cu cutoff grade, the mine life would be approximately 15 years and the cash cost per pound of copper would be approximately US$1/lbs (using an 88% copper recovery, 90% gold recovery) net of by-product credits. We will keep our eyes on Golden Cross as this scoping study indicates there’s definitely some potential here.
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Disclosure: The author holds no position in Golden Cross Resources. Please see our disclaimer for current positions.
