The Next Wave of Projects in the Gold Sector
The developers heading to the Mining Forum Americas in Colorado Springs next week with fresh studies in hand
There has been a flurry of economic studies for new gold projects released this year, with rising gold prices improving the outlook.
Advanced projects
Earlier this year, Barrick Mining Corporation (TSX: ABX) completed an updated feasibility study for its 50%-owned Reko Diq copper-gold project in Pakistan.
The updated feasibility study outlined a 37-year mine life with a total estimated capital investment on a 100% basis of US$8.83 billion across two phases.
The US$5.6-6 billion, 45 million tonne per annum, phase one development was approved in February and construction is underway, with first production expected in 2028.
Phase one will produce 240,000 tonnes of copper and 297,000 ounces of gold per year, with phase two, from 2034, expanding to 90Mtpa for production of 460,000tpa of copper and 520,000ozpa of gold.
Barrick estimates the project will deliver an internal rate of return of 21.32%, generate US$90 billion in operating cashflow and $70 billion in free cashflow, based on a copper price of US$4.03 per pound and gold price of US$2045 per ounce.
G Mining Ventures Corp (TSX: GMIN) is poised to make a development decision on its Oko West gold project in Guyana in the current half after reporting feasibility study results in February.
The study outlined average gold production of 350,000ozpa at AISC of US$1123/oz.
Based on a gold price of US$2500/oz, the project has a post-tax NPV5 of US$2.2 billion with an IRR of 27%.
The July feasibility study for B2Gold Corp’s (TSX: BTO) Gramalote project in Colombia outlined a US$740 million open pit operation with an initial mine life of 11 years and processing life of 13 years.
Average gold production is forecast at 227,000ozpa for the first five years and 177,000ozpa over the life of mine at AISC of US$985/oz.
Using a US$2500/oz gold price, the project has a NPV5 of US$941 million, IRR of 22.4% and a payback period of 3.4 years.
The company needs to modify the project’s permits, which it expects should take 12-18 months.
In April, Osisko Development Corp (NYSE/TSXV: ODV) announced the results of a positive optimised feasibility study for its permitted C$881 million Cariboo gold project in central British Columbia.
Cariboo will produce 190,000ozpa at AISC of US$1157/oz over 10 years from the second half of 2027.
The study returned a base case post-tax NPV5 of US$943 million, unlevered IRR of 22.1% and payback of 2.8 years at a gold price of US$2400/oz, improving to US$2.06 billion, 38% and 1.6 years, respectively, at US$3300/oz.
In July, Osisko secured a US$450 million project loan facility from Appian Capital Advisory and last month, raised US$203 million in a private placement, which, when combined with potential offtake, is expected to fund the construction of Cariboo.
Vista Gold Corp (NYSE American/TSX: VGZ) recently released the results of an updated feasibility study for its Mt Todd gold project in Australia’s Northern Territory, downsizing the proposed throughput rate to 15,000tpd from the previously planned 50,000tpd.
Capex dropped 59% to US$425 million for an operation which would produce an average 146,000ozpa at AISC of US$1499/oz over 30 years.
At a gold price of US$2500/oz, the study returned a post-tax NPV5 of US$1.1 billion, an IRR of 27.8% and a 2.7-year payback, improving to an NPV of US$2.2 billion, IRR of 44.7% and 1.7-year payback at US$3300/oz.
The company said the smaller project could be attractive to existing producers and gold investors and could be financed on attractive terms in the current market.
In late June, Ausgold (ASX: AUC) outlined plans for a 10-year operation at its Katanning gold project in Western Australia.
Capex in the definitive feasibility study was forecast at A$355 million for an open pit operation which would produce 140,000ozpa in the first four years at AISC of A$2180/oz.
Using a A$5000/oz gold price delivers a A$1.36 billion post-tax NPV5 and 68% IRR.
The company is advancing permitting and early works and is already re-optimising the DFS following the A$35 million acquisition of freehold land covering the project in August.
In July, Brightstar Resources (ASX: BTR) released a DFS for the staged A$120 million development of its Menzies and Laverton gold projects in WA, outlining production of an average 70,000ozpa over five years at AISC of A$2991/oz.
The company plans to toll treat ore from Menzies for up to two years while it builds a mill at Laverton.
Using a base case gold price of A$5000/oz, the project has an NPV of A$316 million and IRR of 73%.
PFS stage
Earlier this month, Aris Mining Corporation (TSX: ARIS) released the results from the prefeasibility study for its 51%-owned Soto Norte gold project in Colombia.
The design for the high-grade underground mine has halved capacity to 3500t per day, with 750tpd to be allocated to material mined by local community groups, replacing informal mills that pollute waterways.
Average production over the 21-year mine life is forecast to be 203,000ozpa at AISC of US$534/oz of gold.
The project has capex of US$625 million and an after-tax NPV5 of US$2.7 billion, IRR of 35.4% and payback period of 2.3 years at a gold price of US$2600/oz, increasing to an NPV of US$3.6 billion and IRR of 42.1% at US$3200/oz.
In February, Rupert Resources (TSX: RUP) completed a PFS for its Ikkari project in Northern Finland, based on an initial 3.5Moz reserve.
Capex was forecast at US$575 million for 20-year open pit and underground operation to produce an average 227,000ozpa of gold at AISC of US$918/oz from 2030.
The study returned a post-tax NPV5 of US$1.7 billion, an unlevered IRR of 38% and payback of 2.2 years, assuming a US$2150/oz gold price. At US$2650/oz, the NPV increases to US$2.5 billion, the IRR to 49% and the payback drops to 1.7 years.
U.S. Gold Corp (NASDAQ: USAU) is progressing a feasibility study on its fully permitted CK gold project in Wyoming after releasing a PFS in February.
The US$277 million project is set to produce 111,250ozpa of gold equivalent at AISC of US$937/oz over 10 years.
Using metal prices of US$2100/oz gold and US$4.10/lb copper, the project has a post-tax NPV5 of US$356 million and IRR of 30%.
PEA stage
In June, Snowline Gold Corp (TSXV: SGD) released the preliminary economic assessment for its Valley gold deposit in Canada’s Yukon Territory.
Valley, with capital costs of C$1.685 billion, is forecast to produce 544,000ozpa of gold at AISC of just US$569/oz in the first five years of production, and an average 341,000ozpa at AISC of US$844/oz over the life of the mine.
Using a conservative gold price of US$2150/oz, the project has a post-tax NPV5 of C$3.37 billion, IRR of 25% and a payback period of 2.7 years.
Increasing the gold price assumption to US$3150/oz increases the NPV to C$6.8 billion, the IRR to 37% and reduces the payback period to 2.1 years.
In February, Northisle Copper and Gold Inc (TSXV: NCX) released the PEA for the phased development of its North Island project on Vancouver Island, British Columbia.
Phase one capital costs were forecast at C$1.1 billion, with a 1.9-year payback, followed by the doubling of throughput in phase two to 80,000tpd to cost an additional C$694 million in year six.
During phase one, average production is expected to be 200,000ozpa of gold and 48 million pounds of copper over five years at cash costs of US$763/oz of gold equivalent.
Using metal prices of US$2150/oz for gold and US$4.20/lb for copper, the post-tax NPV7 for both phases is C$2 billion with an IRR of 29%.
In July, Spanish Mountain Gold (TSX-V: SPA) released a PEA for its namesake project in British Columbia, which envisioned a C$1.25 billion, 24.5-year open pit operation to produce 3Moz of gold.
The base case post-tax NPV5 is C$1.02 billion, IRR is 18.2% and payback is 3.4 years, using a gold price of US$2450/ounce.
Increasing the gold price to US$3300/oz increased the after-tax NPV to C$2.31 billion and the IRR to 32% and reduced the payback to two years.
Earlier this month, Amex Exploration Inc (TSXV: AMX) reported the results of an updated PEA for the Perron gold project in Quebec.
The company is targeting a C$146.1 million, four-year, phase one toll-milling operation from 2028 to produce 102,000ozpa at AISC of US$1165/oz
That would fund a C$191.6 million, phase two operation to produce 93,000ozpa at AISC of US$1027/oz over a further 13 years.
Using a US$2500/oz gold price, the PEA returned a post-tax NPV of C$1.085 billion, IRR of 70.1% and payback period of 1.4 years.
i-80 Gold Corp (TSX: IAU) released several PEAs for projects in Nevada within weeks of each other earlier this year.
Its US$200 million Granite Creek open pit is expected to produce 130,000ozpa over 10 years at AISC of US$1225/oz, while the Granite Creek underground, already in production, is expected to ramp up to 60,000ozpa over eight years.
The US$157 million Cove underground project is forecast to produce 100,000ozpa over eight years at AISC of US$1303/oz.
Any production from Granite Creek and Cove will be processed via a third-party autoclave until the refurbishment of the company’s Lone Tree facility is completed in 2028.
The larger Mineral Point project has capex of US$708 million for a 17-year, open pit, heap leach operation.
The mine would produce 280,000ozpa of gold equivalent at AISC of US$1400/oz.
At a gold price of US$2900/oz, the project has an NPV5 of US$2.09 billion and IRR of 27%.
In July, New Found Gold Corp (TSXV: NFG) released the first economic assessment for its Queensway gold project in Newfoundland and Labrador in the form of a PEA.
Phase one, targeted for 2027, has capital costs of C$155 million for a four-year mine to produce 69,300ozpa at AISC of US$1282/oz, which would fund the C$442 million phase two development to increase production to 172,200ozpa at AISC of US$1090/oz.
The after-tax NPV5 increases to C$1.45 billion from C$743 million and the IRR increases to 197% from 56.3% when using a gold price of US$3300/oz from the base case US$2500/oz.
Radisson Mining Resources Inc (TSX-V: RDS) reported a PEA for the O’Brien gold project in Quebec in July, which assumes toll milling at the Westwood mine.
The C$175 million project would produce 647,000oz over 11 years at AISC of US$1059/oz.
The study returned a NPV5 of C$532 million, IRR of 48% and payback of two years at a gold price of US$2550/oz, or NPV5 of C$871 million, IRR of 74% and payback of one year at US$3300/oz.
St Barbara (ASX: SBM) reported a concept study in May for its 15-Mile processing hub in Nova Scotia, incorporating the Cochrane Hill and Beaver Dam projects.
The C$251 million, 3Mpta project would produce 106,000ozpa over 11 years at AISC of US$1197/oz.
The project has a post-tax NPV5 of A$1.08 billion and IRR of 76%, using a gold price of US$2500/oz.
Dakota Gold Corp (NYSE American: DC) released initial economics for its Richmond Hill heap leach gold project in South Dakota in July, which has been described as one of the largest oxide development projects in the US.
The study identified a 17-year life to produce 2.6Moz, based on measured and indicated resources, and a 28-year life to produce 3.9Moz when including inferred resources.
At a base case gold price of US$2350/oz, the US$384 million project has an after-tax NPV5 of US$1.6 billion and IRR of 55% for the M&I plan, and US$2.1 billion and 59% respectively for the MI&I plan.
After restarting its Madsen mine in Ontario in May, West Red Lake Gold Mines (TSXV: WRLG) released a PEA for its Rowan project in the district.
For capex of just over C$70 million, Rowan would produce an average 35,230ozpa over five years via a third-party plant at AISC of US$1408/oz.
The project has a post-tax NPV of US$239 million and IRR of 81.7% at a gold price of US$3250/oz.
Due imminently
Ramelius Resources (ASX: RMS) is due to release the DFS for its Rebecca-Roe gold project in WA this month.
The December 2024 PFS highlighted the potential for a 130,000ozpa operation at AISC of A$2346/oz.
Heliostar Metals (TSXV: HSTR) is planning to release a PFS for the Cerro del Gallo deposit in Mexico by the end of the quarter.
A 2020 PFS outlined a heap leach operation to produce 77,000ozpa gold equivalent over a 15-year mine life.
Tesoro Gold (ASX: TSO) has flagged the release of an updated open pit scoping study for the 1.8Moz Ternera deposit in Chile this month.
A 2023 study defined a 7.4-year project to produce 93,000ozpa at AISC of US$1068/oz.