Castle Hill output expectations doubled
PERTH (miningweekly.com) – An updated mining study for the proposed Castle Hill Stage 1 gold mine, which ASX-listed Phoenix Gold and Norton Gold Fields are jointly developing, has more than doubled production expectations.
A February 2014 study delivered by Phoenix to Norton, estimated that the Castle Hill Stage 1 project, which consists of the Mick Adams/Kiora and Wadi projects, could deliver about 142 800 oz of gold from mining of 2.3-million tonnes of ore, grading 2.03 g/t gold.
The 2014 study estimated that the project would generate A$35-million in net cash flow, at a gold price of A$1 400/oz.
However, a new mining study, which was commissioned after Norton exercised its earn-in option into the Castle Hill Stage 1 project in August last year, has now revealed that the project could deliver about 398 200 oz of gold from mining 8.7-million tonnes of ore, grading 1.51 g/t gold.
At a gold price of A$1 350/oz, the project could potentially deliver A$91-million net cash flow. The project’s estimated total revenue has increased from A$199.9-million to A$509-million.
“While this study is one of many evaluations undertaken, the latest results of the mining study are very encouraging and demonstrate robust project economics, particularly at current gold prices,” said Phoenix MD John Price.
Under the terms of the earn-in agreement, Norton would provide the required up-front capital, and would also fund the mining, haulage and milling activities, with Phoenix receiving 50% of the cash surplus.
Ore from the mine would be transported to Norton’s processing facilities at the Paddington operation, some 35 km to the east, and a staged mine design and ore schedule was likely to be implemented.
It was currently assumed that opencut mining would be conducted using Norton’s fleet.
Norton would provide the final mine design and ore schedule and it could result in different physical and financial outcomes.
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