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. The Company is aiming to improve on the key metrics of production and mine life in a Pre-Feasibility Study due for completion in the September quarter 2022.
Highlights from the Scoping Study include:
- Average gold production ranges from approximately 473,000oz per annum for the first five years to approximately 427,000oz per annum over the 10 year evaluation period:
- Places the Project in the top five Australian gold mines and a top three global gold development project based on average annual output
- Average feed grade of 1.6g/t Au in the first five years and 1.4g/t Au over the current 10 year evaluation period
- The percentage of JORC Indicated resources is 78.1% (Inferred 21.9%) over the first five years and 70.2% (Inferred 29.8%) over the current 10 year evaluation period
- Average All-in Sustaining Cost (AISC) ranges from approximately $1,111/oz over the first five years to approximately $1,224/oz over the current 10 year evaluation period. This places the Project in the lowest quartile of Australian gold producing peers
- Estimated capital cost for a 10Mtpa plant and site infrastructure of approximately $835M inclusive of a 25% ($167M) contingency
- Total pre-production capital of $893M inclusive of $58M pre-stripping and contingency
- Attractive pre-production capital intensity of global gold development projects based on average annual gold production
- Average processing recovery of approximately 93% is based on conventional comminution, flotation, oxidation via one of pressure oxidation, Albion or biological oxidation, and CIL. The optimal oxidation process route will be determined with further studies
- Attractive financial outcomes demonstrating the quality of the Mallina Gold Project:
- Pre-tax undiscounted free cashflow of approximately $3.9 billion (post-tax $2.9 billion) over 10 years
- Pre-tax Net Present Value (NPV5%) of approximately $2.8 billion and post-tax NPV 5% of $2.0 billion
- Pre-tax Internal Rate of Return (IRR) of approximately 60% and post-tax IRR of 49%
- Unleveraged payback of approximately 1.5 years (pre-tax) and 1.8 years (post-tax)
- Production and financial metrics of the project to be optimised with anticipated resource growth and further studies
To view the full details of the Scoping Study, including important supporting information and disclaimers, please view the Scoping Study announcement.