Santana Minerals has announced that the Bendigo-Ophir gold project in New Zealand will require an initial capital expenditure (capex) of A$340m ($220m), based on the findings of a preliminary feasibility study (PFS).
The initial capex includes A$208m ($134.4m) for the plant and all associated mine infrastructure. It also includes A$132m ($85.4m) in pre-production capex for the enlarged 39.5 million tonnes (Mt) pre-strip, aimed at enabling higher initial gold production.
According to the PFS, the total capex over the Bendigo-Ophir gold project’s mine life is estimated at A$546m ($353m).
The gold project is expected to yield 147,000 ounces of gold annually during the first three years of production, with an average output of 125,000 ounces per year over an initial mine life of 9.2 years.
Besides, the PFS estimates a total production of 1.15Moz of gold from open pit and underground mining at the Bendigo-Ophir gold project.
The study also includes a conventional 1.5 million tonnes per annum (Mtpa) carbon-in-leach (CIL) processing plant, designed to achieve an average metallurgical recovery of 92.4%. The plant is projected to have a throughput capacity of 1,835ktpa.
The PFS projects a post-tax net present value (NPV) of A$1.06bn ($690m) for the gold project. It also estimates an after-tax internal rate of return (IRR) of 68%, with a simple payback period of 1.7 years from the commencement of production.
In addition, the study reveals that the Bendigo-Ophir gold project will generate an estimated revenue of nearly A$4.6bn ($3bn) and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of about A$3.05bn ($2bn).
Santana Minerals CEO Damian Spring said: “We have upscaled the initial years of gold output commensurate with a deliberate decision to enlarge the mine pre-strip. Our detailed geotechnical works have recommended more conservative pit wall slopes than our scoping study resulting in higher strip ratios.
“However, our high-grade deposit combined with strong gold prices gives effect to a vastly improved post-tax NPV, valuing the project at multiples of the current market cap. We still believe we can improve the project from here and will be working to that end whilst advancing permitting.”
Located on the South Island, the Bendigo-Ophir project covers tenements cover 251km2 in the Central Otago goldfields, 90km northwest of Oceana Gold’s Macraes gold mine.
Santana Minerals’ board has decided to proceed with a detailed construction plan and initiate discussions on financing.
Activities related to resource consents and mine permitting will continue, with the aim of applying for fast-track approval in February 2025, said the company.
