- Musgrave Minerals (MGV) says its Cue gold project in Western Australia could be “one of the highest-margin undeveloped gold projects in Australia”
- A new pre-feasibility study (PFS) shows an initial five-year life-of-mine (LOM) undiscounted, pre-tax, cash flow of $314 million over the five years, with a payback period of nine months once production begins
- The company expects the project to produce 337,000 ounces of gold at an average LOM all-in sustaining cost (AISC) of $1315 per ounce.
- The project’s pre-tax net present value at an eight per cent discount rate sits at $235 million, with an internal rate of return (IRR) of 95 per cent
- MGV shares closed 2.08 per cent lower at 23.5 cents on Monday afternoon
Musgrave Minerals (MGV) has completed a stage-one pre-feasibility study (PFS) for its Cue gold project in WA, highlighting “one of the highest-margin undeveloped gold projects in Australia”.
The study showed an initial five-year life of mine (LOM) undiscounted, pre-tax, cash flow of $314 million over the five years, with a payback period of nine months once production begins.
The company expects the project to produce 337,000 ounces of gold, with an average of 80,000 ounces per year in the first three years.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) is $528 million, with an average LOM all-in sustaining cost (AISC) of $1315 per ounce.
The project’s pre-tax net present value at an eight per cent discount rate (NPV8) sits at $235 million, with an internal rate of return (IRR) of 95 per cent.
“The stage one PFS predominantly focuses on the current indicated mineral resources at Cue, which constitute only 47 per cent of the total resource base,” MGV Managing Director Rob Waugh said.
“The stage one PFS includes the mining of six open-pit deposits (Break of Day, White Heat, Lena, Big Sky, Numbers and Leviticus) and an initial two years of gold production from the upper levels of the Break of Day underground mine.”
The company is planning to advance to stage two of the PFS by continuing its exploration and drilling and plans to update the project’s mineral resource estimate late this year.
“The stage two PFS is set to add mine life through the extension and conversion of existing inferred resources to the higher confidence indicated category, together with the potential inclusion of newly discovered resources,” Mr Waugh said.
“The project has significant upside growth potential with recent discoveries like Amarillo and Waratah expected to add to the resource base in 2023 to align with the delivery of the stage two PFS in early 2024.”
MGV shares closed 2.08 per cent lower at 23.5 cents on Monday afternoon.