EganStreet Resources Ltd’s (ASX:EGA) definitive feasibility study (DFS) has confirmed the economic and technical viability of the Rothsay Gold Project in Western Australia.
The DFS determines that a maiden ore reserve of 200,000 ounces would allow an initial 6.5-year mine life where production could be ramped up to 60,000 ounces a year.
The company estimated the project could generate strong cashflows, tipping its ramp-up could be achieved with a $1,083 an ounce all-in sustaining cost.
EganStreet’s DFS is based on processing 1.2 million tonnes at an average grade of 6.94 g/t gold for about 250,000 ounces of production, where both indicated and inferred resources are mined.
Managing director Marc Ducler said the study demonstrated the gold project was of a high quality.
“The DFS outlines a robust project characterised by a modest capital cost, low forecast operating costs and strong margins.
“This underpins robust economics including an undiscounted pre-tax project cash-flow of $100 million, $80 million net present value and rapid capital payback of less than 1.5 years using a gold price of $1,700 per ounce.
“Given Rothsay’s Tier-1 location and robust economics, we are confident of being able to secure a very attractive financing package in the second half of this year, paving the way for construction to begin before year-end.”
Ducler tipped the project was suited to production target increases, with growth opportunities to the southern end of the project at Woodley’s and Woodley’s East Shear to be explored will drilling later this quarter.