Ramelius Resources Ltd (ASX:RMS) will expedite development of the Penny Gold Project near Mt Magnet in Western Australia after receiving positive feasibility study results.
As a result of compelling financial outcomes from the study, the company has approved a decision-to-mine to bring the project into production in the June 2021 quarter, slightly earlier than contemplated by the pre-feasibility study (PFS).
At the company’s Edna May project, also in WA, an underground study has resulted in an updated resource estimate of 31 million tonnes at 1.1 g/t for 1 million ounces.
Within this is a high-grade lode subtotal of 490,000 tonnes at 4.5 g/t for 72,000 ounces.
Penny feasibility study
The Penny feasibility study has improved metallurgical recovery from 92% to 95% and reduced ASIC to A$633 per ounce compared to the PFS figure of A$703.
Upfront capital cost has increased to A$34.5 million due largely to a re-allocation from operating costs to capital.
The study has projected an NPV at 5% of A$301 million at $2,300 per ounce while IRR is 240%, with a payback period of 26 months.
Estimated gold production has increased from 230,000 ounces to 238,000 ounces and revenue from A$530 million to A$547 million.
Mining is expected to begin at the project, which is about 20 kilometres south of Youanmi or 170 kilometres by road southeast of Mt Magnet, later in the June quarter of 2021.
Resource update at Edna May
At Edna May, infill and extensional diamond drilling has been completed and the resource model updated, with the revised estimate 22% larger than previous.
An option study for bulk underground versus narrow vein mining is progressing and this will also include consideration of Stage 3 open pit and potential interaction.
The underground bulk versus high grade only mining study is continuing, and the company expects both underground and open pit studies will be completed by the end of the current quarter.