Australian mining company Aurelia Metals has unveiled the results from its recently completed feasibility study (FS) at Federation Mine, located in central New South Wales, Australia.
Federation mine is located around 10km south of the company’s Hera Mine, where high-grade lead, zinc and gold mineralisation was discovered in April 2019.
The study predicts strong technical and economic viability for the development of an underground mining operation at the Federation deposit.
It suggests the adoption of a low-risk milling strategy, and the use of existing processing assets, to reduce capital and risk, advance production, and deliver NPV and IRR benefits.
The mine is estimated to produce a total of 4Mt for an initial life of eight years, with an average recovered metal production of 44kt zinc, 25kt lead, 11koz gold and 74koz silver per annum.
Aurelia managing director and CEO Dan Clifford said: “We are pleased to release the outcomes of the Feasibility Study evaluation for the Federation Mine.
“Federation is one of the great discoveries of recent decades in the Cobar Basin – a very high-grade polymetallic deposit that, while defined to its current boundaries for the purposes of recent Mineral Resource Estimate and Feasibility Study cut-offs, remains open in multiple directions with further potential to extend.
“Given this potential, it is important to note that the Federation Feasibility Study represents just the starting physical and economic picture of the development of the Federation.
The company declared a maiden Ore Reserve of 2.2Mt at 1.4g/t Au, 0.3% Cu, 5.3% Pb, 8.9% Zn and 6g/t Ag for Federation Mine.
It will transport higher value ore to Peak mill for the production of gold doré and separate Pb-Cu and Zn concentrates, and the rest to Hera plant to produce gold doré and Pb-Zn concentrate.
Aurelia said that the deposit will have potential upside from an extended, long-life, high-margin asset, in addition to the planned extensional drilling.
The final regulatory approval for production activities at the Federation Mine is expected by the middle of the calendar year 2023.
Furthermore, Aurelia will start a consultation process with Traditional Owners and First Nations stakeholder groups to rename the operation with an indigenous name.
Clifford added: “The decision to treat Federation ore through our existing mills at Peak and Hera was, in the end, an easy one.
“Given how the construction market and cost environment has moved over the past 12 months, it is, quite simply, the most direct and lowest risk pathway to realising the value and delivering shareholder returns from the Federation deposit.
“Finally, the opportunity cost to the business is minimal given that the Hera mine is approaching depletion and rescheduling of Peak mine operations to focus on higher margin material has created capacity for treatment of the higher value Federation ore.
“We retain substantial flexibility within our portfolio. Depending on how Federation grows going forward, we maintain the option to construct a dedicated, standalone processing facility for Federation ore in order to maximise metal recoveries and payabilities.”
