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Pantoro DFS confirms robust economics for phase one Norseman restart

Last updated: 01:23 12 Oct 2020 BST, First published: 01:00 12 Oct 2020 BST

Pantoro Ltd - Pantoro DFS confirms robust economics for phase one Norseman restart
Exploration will continue over Lake Cowan and other priority targets throughout phase one construction and mining

Pantoro Ltd's (ASX:PNR) definitive feasibility study (DFS) for phase one of the restart of operations at Norseman Gold Project confirms a financially robust seven-year mine life for the project.

Net present value (NPV) for this phase of the project is $384 million (pre-tax) with an internal rate of return (IRR) of 92% (pre-tax) at A$2,600 gold price.

The project will have average annual production of 108,000 ounces, peaking at 119,000 ounces in year two of production, with life of mine (LOM) average All in Sustaining Cost (AISC) of $1,292 per ounce.

“Impressive production and financial metrics”

The expected pre-production capital cost for the restart is $89 million with Pantoro’s 50% share at $44.5 million, with a 12-month construction period and payback in 1.3 years.  

Pantoro managing director Paul Cmrlec said: “The outcome of the DFS for phase one of the Norseman Gold Project has met our expectations with impressive production and financial metrics.

“The resource development works conducted to date have been focused on six initial mining areas which represent less than one third of the total mineral resource inventory.

“From these six initial mining areas, the DFS for phase one has returned a robust result for the restart of operations at the Norseman Gold Project.”

Open pit and underground production

The initial ore reserve of 602,000 ounces includes 4.9 million tonnes at 3.2 g/t gold for 502,000 ounces of open pit and underground ore and 4.2 million tonnes at 0.8 g/t gold for 100,000 ounces of surface stockpiles.

Phase one life of mine production is expected to hit 5.9 million tonnes at 3.2 g/t gold for 610,000 ounces with metallurgical recovery of 95% producing 580,000 ounces.

The processing plant capacity will be 1 million tonnes per annum with the flexibility to expand to 1.5 million tonnes per annum.

Primary focus areas in Phase One update mineral resources.

“Potential to extend mine life”

Cmrlec said: “The phase one DFS provides strong returns based on the initial mine life and low operating costs.

“In addition, there is significant potential to extend mine life from future planned targeted drilling.

“The majority of the areas to be mined during phase one are considered likely to continue deeper and Pantoro is confident that drilling at depth will confirm ongoing mine life extensions as is the case for most Western Australian Gold operations.”

“Doubling the mining inventory”

Less than one-third of the in-situ global mineral resource has been considered in the phase one DFS.

The company’s strategy over the next 12-18 months is to double the ore reserve with 100,000 metres of additional drilling.

Cmrlec said: “During the phase one definition phase, mineral resource to ore reserve conversion has been achieved at the very low cost of $22.53 per ounce, demonstrating the relatively small spend required for further ore reserve addition.

“These activities will continue to be aggressively advanced with the goal of doubling the mining inventory over the next 12 to 18 months.

“Work is to be focused on the high grade Mainfield and Scotia deeps areas during the next six to 12 months and we expect to add more high-grade underground feed sources to the base inventory.

“As is always the case for multiple mine assets, the mine schedule will be continually updated as additional ore sources are added to the inventory.”

Next steps

In the near-term, Pantoro is focused on completing approvals processes and preparing tender documentation to rapidly progress to construction and operations.

Cmrlec said: “The project team is now focused on completing relevant statutory approvals.

“Tender documentation for the processing plant EPC and for mining works is well advanced and is expected to be released to potential external providers in the next few weeks.”

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