Red Mountain Mining Ltd (ASX:RMX) has now unveiled the results of the now completed Pre-Feasibility Study (PFS) on the company’s flagship Batangas Gold Project, located 120 kilometres south of Manila in the Philippines.
Jon Dugdale, managing director for Red Mountain, commented:
“This Pre-Feasibility Study demonstrates the low operating costs, high margins and strong cashflow potential of the Batangas Gold Project.
“The high initial ore reserve grades from surface, averaging over 6.6 grams per tonne gold for the South West Breccia pit, will allow this project to achieve strong early cash flows and a high rate of return on initial capital.
“In addition, there is potential to expand ore reserves through drilling of the over 320,000 ounces of additional, mostly inferred, resources and upside potential remains to be tested within the 14 kilometres of identified epithermal gold structures at Lobo.
“The JV partners are now aiming to complete the Definitive Feasibility Study on the Batangas Gold Project by this calendar year."
Key highlights:
- Batangas will generate A$46 million in free cash flow during first 7 years of production, after capital and pre-corporate tax and administration at a gold price of A$1,700 ounce;
- Maiden open-pit Ore Reserve of 128,000 ounces of gold, including high-grade 100,000 ounces at 4.2 g/t gold;
- Recovered production of 116,000 ounces of gold, an increase of 26,000 ounces from the Scoping Study;
- Low C1 cash operating costs of US$735 per ounce / A$999 per ounce of recovered gold;
- Low up-front capital costs of US$16 million / A$22 million, including new CIL processing plant;
- Additional 320,000 ounces of gold in majority Inferred Resources remains available for future conversion; and
- Immediate upside potential within the 14 kilometres of identified mineralised structures at Lobo.
Analysis
The Batangas joint venture partners, Red Mountain and Bluebird Merchant Ventures, have approved the PFS and the immediate transition to Definitive Feasibility Study (DFS).
Financing of the project will require a certain level of debt financing, particularly for the new CIL processing plant and associated infrastructure.
Discussions with potential debt financiers are ongoing and will be advanced, targeting financing agreements in parallel with completing the DFS.
Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.