Regis Resources’ Duketon gold project in Western Australia has been given the go-ahead to be developed into a 145,000 ounce a year gold producer, the company’s managing director David Walker said in a statement released today.
“The economics of the project, particularly in the current gold climate, are very strong and offer significant value to shareholders,” Walker said.
Completion of a definitive (bankable) feasibility study put the wheels in motion for construction to begin in the third quarter of this year.
The study was completed in conjunction GR Engineering which undertook the initial engineering and design work and also coordinated technical inputs from consultants.
The study was based on the construction of a new plant, infrastructure and accommodation facilities for a total capital cost of $125.3m.
In addition, it is anticipated that $6.8m of prestripping and capital works activities will be capitalised, and allowance for a further contingency of $10.7m has been made.
The project is anticipated to produce 543kozs of gold over its initial mine life of 5 years (based solely on currently published reserves) at an average cash cost of A$495/oz (pre-royalties).
According to the company, the low cost scraper mining method and the ability to process higher grade laterite ores means cash costs for the first year of production following commissioning are sub A$350/oz (pre-royalties) allowing for rapid repayment of project debt.