Nusantara Resources Ltd’s (ASX:NUS) definitive feasibility study (DFS) has confirmed that the Awak Mas Gold Project in South Sulawesi, Indonesia, is a robust, long-life and low-cost project.
The DFS supports an initial 11-year project from two open-pit mines producing about 100,000 ounces of gold annually delivering strong margins.
These include a post-tax NPV of US$152 million, with a 20.3% IRR using a gold price of US$1,250 per ounce.
Project “financially robust”
Nusantara’s managing director and CEO Mike Spreadborough said the study confirmed that the project was technically feasible, financially robust, with significant opportunities to increase project value through optimising the mineral resources and through further exploration.
“The completion of the DFS is a significant milestone for the company, with work now progressing on securing financing for project development and continuing exploration.”
The DFS outlines initial capital cost of US$146 million, pre-production mining expenditure of US$16 million and project sustaining capital of US$29 million.
C1 cash cost has been estimated at US$643 per ounce with an All-In Sustaining Cost (AISC) of US$758 per ounce.
READ: Nusantara Resources increases ore reserve at Awak Mas Gold Project by 11%, DFS due this month
Awak Mas has an ore reserve of 1.1 million ounces within a 2 million-ounce mineral resource.
It is one of a few undeveloped gold projects within the Asia-Pacific and now has a completed DFS with all approvals in place for development.
The project is supported by good infrastructure, with access to low-cost grid power, port facilities 45 kilometres from the project and multiple daily flights from the city of Makassar.
Nusantara has also identified mineralisation at several near-mine prospects that has potential to add to resources.
Strong gold and copper results
Surface and trench sampling adjacent to the Awak Mas and Salu Bulo deposits has returned strong gold and copper results of up to 2.8 g/t gold and 1.2% copper.
Three significant new gold and copper outcrops have been identified on intrusive related quartz veining covering an area of about 250 by 100 metres.
The company’s immediate exploration focus is exploring near-mine prospects within a 3-kilometre radius of the proposed processing plant with the aim of extending the proposed 11-year operation.
Spreadborough said, “These promising early exploration results demonstrate the potential of the Awak Mas project to grow organically and provide potential high-grade satellite operations to augment production from the existing deposits.
“Our confidence in the exploration model, together with a renewed focus on geophysics and the possibility of further and substantial discovery, add enormously to the future long-term viability of the project.”