Project Studies

De Grey is advancing project studies based on a development scenario involving a centralised mining and processing operation at the Hemi discovery and satellite feed from deposits in the wider Mallina Project region, including Greater Hemi.

An initial evaluation of the Mallina Gold Project was contained in a Scoping Study completed in October 2021 and was based on the Maiden Mineral Resource Estimate for Hemi released in June 2021.

These outcomes were improved upon in a Pre-Feasibility Study (PFS) completed in September 2022 which was based on the updated Mineral Resource Estimate released in May 2022. The PFS also included a Maiden Ore Reserve for Hemi.

Highlights from the PFS and Maiden Ore Reserve include the following:

Production Profile and Maiden Reserve

  • Average total annual gold production1 of 540,000ozpa over the first 10 years
      • 550,000ozpa in years 1 to 5
      • Peak production of 637,000ozpa in year 5
  • Hemi alone contributes average annual gold production of approximately 500,000ozpa over the first 10 years and 520,000ozpa in years 1 to 5
  • Total production of 6.4Moz over a 13.6 year life of mine
  • Maiden Hemi JORC Probable Ore Reserve of 103Mt @ 1.5g/t Au for 5.1Moz
  • Increased production in the PFS is driven by increased Hemi Resources, JORC Resource confidence level and grade at all deposits, particularly Diucon and Eagle
  • Hemi in production will be in the top five Australian gold mines and is a top three global undeveloped gold development project based on average annual gold production rates

Financial Metrics – Unleveraged

  • Undiscounted free cashflow of $5.9 billion pre-tax and $4.2 billion post-tax
  • Net Present Value (NPV5%) of $3.9 billion pre-tax and $2.7 billion post-tax
  • Internal Rate of Return (IRR) of 51% pre-tax and 41% post-tax
      • Payback of 1.6 years pre-tax and 1.8 years post-tax
      • Average All-in Sustaining Cost (AISC) of $1,220/oz (Yrs. 1 to 5) and $1,280/oz (Yrs. 1 -10)
  • Capital cost for the 10Mtpa plant and site infrastructure estimated to be $985M inclusive of $100M in growth allowance. Additional mine preproduction pre-strip capital cost of $68M
  • Mallina will be in the lowest quartile of Australian producing gold mines 4 and one of the world’s lowest capital intensive gold projects

Production Confidence Levels

  • Percentage of JORC Measured and Indicated Resources is 97% (Inferred 3%) over the first five years, 89% (Inferred 11%) over the first 10 years and 87% (Inferred 13%) over the current 13.6 year mine life
  • Hemi deposits comprise approximately 95% of production over the first five years and approximately 85% of production over the first 10 years
  • Mine scheduling software has targeted high grade, low strip ratio ore and with run of mine (ROM) stockpile management delivers an average feed grade over the first 10 years of 1.8g/t Au

Processing

  • Nameplate plant throughput of 10Mtpa for the comminution, flotation and CIL circuits with pressure oxidation circuit throughput of 0.8Mtpa
  • Average processing recovery of 93.6% over the life of mine from extensive testwork demonstrates excellent amenability of mineralisation to the flowsheet developed for the Project

ESG

  • Extensive environmental baseline studies and testwork have been conducted across the Project since 2020
  • Widespread community and traditional custodian engagement has been conducted including social impact assessments of the Project
  • Engagement with the Kariyarra people on an agreement which provides employment, training, community programs and other benefits
  • Heritage clearances have been completed over the Project development and operations area
  • The decarbonisation plan forecasts the operation commencing at approximately 0.6 tonnes of CO2 per annual ounce of gold production (t.CO2/ozpa) reducing to approximately 0.3t.CO2/ozpa by 2030 with further reductions in carbon intensity to be pursued
  • Early adoption of grid based renewable energy planned with multiple options emerging within the North West Interconnected System

To view the full details of the September 2022 Pre-Feasibility Study, including important supporting information and disclaimers, please view the Announcement and Presentation

To view the full details of the October 2021 Scoping Study, including important supporting information and disclaimers, please view the Announcement and Presentation

The Definitive Feasibility Study is due for completion in mid-2023.

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