Latest work on re-opening the historic Talisman gold mine at Karangahake has seen projected direct operating costs reduced to $NZ710 per ounce ($US490/oz).
Owner New Talisman Gold Mines Ltd (NZX & ASX: NTL) said yesterday that an updated pre-feasibility study (PFS) had increased the net present value of the project from $15 million to $36 M.
New Talisman said the new study shows it has a highly profitable, small-scale operation.
Chief executive Matthew Hill said the study demonstrates the robustness of the project economics, showing an IRR of 118%.
“With a scoping study on Talisman Deeps being finalised in the coming days on the high-grade resources and activity at the mine ramping up, we are starting to see the results of the team’s hard efforts.”
Key drivers for the increase in value were:
- Increased ounces available for extraction through gold equivalent oz in the measured and indicated categories increase by some 18,000 oz. These are included in the mining plan which has seen an increase in expected gold production of some 18,800 oz gold equivalent.
- Increased mine life on the back of the increased oz life-of-mine being extended by a year giving a current expectation of six years for this first stage.
- Grade: Run-of-mine grade, on a gold equivalent basis, has increased from 11.2 grams/tonne to more than 27 g/t.
- Breakeven gold price has reduced to $NZ820/oz.
- Unit operating costs significantly reduced with costs to extract ore and bring it to surface (C1 cost) of $NZ583/oz and cost to produce an economic oz (C2 cost) being $NZ710/oz. With the $NZ gold price sitting at $NZ1,882/oz this demonstrates the project’s robust nature.