Alara Resources Ltd (ASX:AUQ) has discovered more high grade copper and gold mineralisation from the first three in-fill holes drilled outside the current resource envelope at the Al Hadeetha Copper-Gold Project in Oman.
The drilling aims, among other things, to bring more of Al Hadeetha’s inferred resource at Washihi into an indicated category as well as expand the resource.
The current Washihi resource contains 14.1 million tonnes at 0.80% copper and 0.18 g/t gold.
The drill results provide further impetus to the recently completed feasibility study which estimates a free cash flow of $109.5 million over 10 years in a conservative base case scenario.
This would generate a projected NPV of $ 37.8 million based on a $66.6 million capex cost, supporting a financially viable project. Of interest, the NPV could double if less conservative forecasts were not used on prices.
The mining licence application is on track, with the Ministry of Housing and Ministry of Water & Electricity submitting approvals of the Al Hadeetha project to the Public Authority of Mining.
The company is also making progress towards securing a major project financing arrangement. The company has indicated that debt financing with recognised financial institutions and vendor financing options are being advanced.
This would provide a clear development pathway in Oman.
Alara shares have been rising steadily, increasing by about 145% since the beginning of 2016.
The company is well funded with a cash balance of $1.7 million as on 31 March 2016.
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