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Legacy Minerals Holdings (ASX:LGM) has completed a Stage One scoping study on its Drake Epithermal Gold-Silver Project, with a 206% increase in the project’s net present value compared to a pre-feasibility study from 2020.
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According to the scoping study at the New South Wales project, Drake’s NPV would be $303 million – in the base case of a pre-tax gold price of $4,250 per ounce, with this representing a 206% increase from the $132M estimate outlined during the PFS (which had used a $2,300 per ounce gold price).
It also showed an internal rate of return of 120% for Drake, plus a free cash flow of $125M, with gold production expected to be 177,100 ounces over 5.5 years, and an all-in-sustaining cost of $1,709 per ounce.
This is based on a mine design built around an open pit, producing an average of 35,230 ounces per annum pa with 83% gold recovery from a one million tonne processing plant.
It also keeps in mind the value Legacy has from already built haul roads, water supply, and tailings dam demonstrated by a CapEx of A$47 million.
“This Scoping Study confirms the outstanding and compelling opportunity of the Drake
Project,” CEO Christopher Byrne said. “With the new 2025 mineral resource estimate now completed and considering the established infrastructure at Drake, this Stage One Scoping Study demonstrates the clear value of the Project and its potential upside through future resource growth and discovery.”
Drake’s payback period would be 14 months from pre-tax cash flows.
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Legacy is now considering a Stage Two study which would consider the inclusion of 450,000 ounces of gold and 24.3Moz of silver defined in the recently updated 2025 MRE. (These weren’t evaluated in the Stage One scoping study.)
The company’s MRE now comprises 0.8Moz gold-equivalent (AuEq) from two gold-rich deposits (23.1Mt at 1.1g/t AuEq), and 35Moz Silver-Equivalent (AgEq) from two silver-rich deposits (11.3Mt at 99g/t AgEq).
LGM rose on the news to trade at 29cps; a +13.73% gain since market open.
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