NexGold, Signal Gold combine to create potential 200,000 oz/y producer
The transaction, said the companies, would bring two near-term development projects together and eliminate the single-asset risks.
St Barbara (ASX: SBM) has updated the prefeasibility study (PFS) for the 15-Mile underground and Beaver Dam open pit projects of its Atlantic Gold division in Nova Scotia.
The study assumes the Touquoy gold mill will be relocated to provide 2.1 million t/y of processing capacity, up from 1.8 million t/y as proposed in the October 2023 PFS.
The company says the update is very attractive for capital and economic reasons, but the projects have yet to be permitted by the federal and/or provincial authorities.
The project is expected to make a significant economic contribution to the region. Nearly C$200 million will be spent in the first 12 months after environmental approval, with a further C$1.03 billion in spending over the project’s planned operating life.
More than 1,000 direct jobs in construction and over 300 direct jobs in the operating phase are anticipated.
Environmental protection has been upgraded with an efficient infrastructure layout to fit within environmental and social constraints. The open pit will be used as the waste dump, leading to final landforms more closely aligned with the original project area. Pit optimization and efficient layout designs will drastically reduce disturbance at the Beaver Dam project.
The project economics are also optimized. The post-tax NPV (discounted at 5%) of C$411 million and post-tax IRR of 37.3% using a long-term gold price of $2,000 per oz.
The pre-production capex will be C$194 million, including a C$26 million contingency, is achieved as a result of the relocation of a substantial portion of Touquoy process plant. Additional capital cost of C$43 million incurred in year 5 of the life of mine to bring on the 412,000 oz. Beaver Dam satellite pit development.
All-in sustaining cost for this low strip ratio project estimated to be $1,025 per oz. Synergies with shared equipment and services across 15-Mile and Beaver Dam will be a major factor in lowering overall unit costs.
Average annual production will be 74,000 oz. of gold annually in each of the 11 years the mine operates.
The construction period will be only one year because the tailings dam can be upgraded and the Touquoy mill reused. Utilization of existing equipment from the Touquoy mine will minimize capital inflation and lead times, de-risk commissioning, and allow a quick ramp up to commercial production.
The Beaver Dam project has total proven and probable reserves of 4.5 million tonnes grading 1.6 g/t gold, containing 223,000 oz. The 15-Mile project has 18.5 million tonnes in four deposits averaging 1.0 g/t gold, containing 620,000 oz. The resources have been calculated to comply with the JORC standards as commonly used in Australia.
The Beaver Dam project is located approximately 15 km northeast of the Touquoy mine, with the 15-Mile project located a further 25 km northeast of Beaver Dam. The PFS study was led by Ausenco Engineering Canada, supported by Moose Mountain Technical Services for mine design aspects of the PFS.
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