Metals X positive on gold project PDF Print E-mail
THE WEST AUSTRALIAN   
Saturday, 12 January 2013 09:33

Metals X has placed a $117.1 million cost estimate on its Central Murchison gold project and says its development is both technically and financially achievable.

The company's definitive feasibility study envisages an open pit and underground mining operation at the historic Big Bell mine 600 km northeast of Perth. The study is based on an initial 11-year minelife and the construction of a new 1.5mtpa processing plant.

The project was estimated to have a pre-tax net present value of $141.9 million with average life of mine cash operating costs of $979 an ounce.

Life of mine revenue is estimated at $1.76 billion with EBITDA of $692 million.

The project hosts probable mining reserves of 1.17 million ounces (15.46 million tonnes at 2.36 grams per tonne gold) and a total mineral resource estimate of 4.95 million ounces (61.2 million tonnes at 2.52 grams per tonne gold).

Metals X says there is also considerable scope for further reserve upgrades.

The company said it had existing cash reserves of $84 million and was in advanced discussions for further debt financing, with indicative term sheets under consideration. Environmental approvals were also "well advanced".

Metals X's executive director and chief executive Peter Cook said the study provided a strong base option to commercialise the project.

"The Murchison region is alive again with at least six companies electing to go it alone with the development or re-start of gold operations on projects with moderate lives and, in most cases, relatively high costs," he said.

"Metals X intends to study the benefits of consolidation of ore processing and development assets in this region before embarking on a decision to commit to its own stand-alone processing facility.

"We believe the (project) stands out against most of these… in terms of the overall mineral resource size and average grade.

"The heart of the… project is higher-grade proved underground mines which, when established, provide for a more sustainable production."

"Whatever we decide, the new gold division of Metals X is determined to become a gold producer… to compliment the strong cash flow from our Renison tin operations."



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