New Century Resources Ltd (ASX:NCZ) has obtained all necessary environmental approvals for the development of the in-situ Silver King and East Fault Block deposits at Century Mine Project in Queensland, Australia, and reinforced the potential of the deposits with a positive optimisation study that indicates robust economics.
New Century says the optimisation study delivered “highly attractive economics” and an improved production profile, with slightly different metrics based on either a ‘base case’ – analyst consensus pricing – or a ‘spot case’ – based on the current spot price of minerals.
Recognising the significance of the approvals and study, investors have sent NCZ shares as much as 8.25% higher intraday to A$2.10.
Production optimisations
The base case offers a pre-tax net present value (NPV8) of A$226 million, with an internal rate of return (IRR) of 91%, resulting in a payback period of 2.2 years while the spot case includes a pre-tax NPV8 of A$246 million, an IRR of 101% and a payback period of 2.1 years.
NCZ's optimisation study also improved the production profile of the project, raising average annual production of lead metal (in-concentrate) by 9% to 36,000 tonnes with 1.07 million ounces of contained silver.
Zinc output was increased 39%, resulting in average zinc metal (in-concentrate) production of 30,500 tonnes per annum.
Additionally, site operation costs were reduced to C1 (direct costs) of US$0.67 per pound and an all-in sustaining cost (ASIC) of US$0.90 per pound.
“Significant near-term opportunity”
“The New Century team is pleased to have achieved a major milestone toward development of Silver King and East Fault Block through obtaining all necessary environmental approvals,” New Century Resources managing director Patrick Walta said.
“The optimisation study has also reinforced the highly value-accretive potential of the in-situ development at Century, materially expanding the production profile and life of asset while reducing site-wide unit costs.
“The results underscore the significant near-term opportunity available via the development of Silver King and East Fault Block that will open up the avenue to continue the utilisation of approximately A$2 billion previously invested in infrastructure at Century to 2030 and beyond.
“We look forward to updating shareholders on further progress in the coming months as we progress toward completion of debt financing and a final investment decision.”
The optimisation study also offered key improvements to the original in-situ feasibility study, improving metallurgic and flowsheet outcomes, reducing lead loss from rheology and pipeline modelling, and improving the quality of grid power supply.
In the interest of maintaining the current development schedule, the company has ordered long lead items, secured initial underground mining equipment, and – through contractor GR Engineering Services Ltd (ASX:GNG) – completed the Front-End Engineering and Design (FEED).
Next steps in development
From here Century will move to execute the Engineering, Procurement and Construction (EPC) contract with GR Engineering Services for process plant upgrades, continue ongoing value optimisation, operational readiness and long lead item procurement, and complete internal approval process and finalisation of debt financing arrangements.
A final investment decision (FID) will follow on from internal and senior debt-finance approvals and debt financing completion, targeted for the second half of this year with first production slated for the second half of 2023.