Alkane Resources is pleased to announce its Scoping Study for the Boda-Kaiser Project.
The Boda-Kaiser Project is a large gold-copper porphyry system in Central West NSW with potential for a long-term bulk-tonnage mining and processing operation. To understand the project economics and potential economies of scale from different-sized operations, and identify a potential pathway to development, Alkane has evaluated three possible scenarios:
- Mining and processing 20 million tonnes of ore per annum
- Mining and processing 10 million tonnes of ore per annum
- Mining and processing 5 million tonnes of ore per annum
Evaluation shows that the largest development scenario is the highest value due to the potential economies of scale. Given its positive economics, the 10 million tonnes per annum development could form part of a staged build for a larger project, or as a standalone project in a rising gold and copper price environment. It is unlikely that a 5 million tonnes per annum development would meet Alkane’s investment return hurdles at current gold and copper prices.
The considered underground mining option uses a Long Hole Open Stoping (LHOS) mining method, consistent with Alkane’s experience at its Tomingley Gold Operations. Given that a high throughput is beneficial to the project economics, future studies will evaluate the potential for sub-level caving or a similar bulk tonnage underground method.
The 20 million tonnes per annum scenario
- Processes 323 million tonnes of ore at 0.26g/t gold and 0.15% copper over 17 years.
- Mines 319 million tonnes from open cut mining and 4 million tonnes from underground mining. 85% of the ore mined comes from Indicated Resource and 15% from Inferred.
- Produces an average 35,600 tonnes of copper and 159,300 ounces of gold per annum for the first five years of operation.
- Costs were estimated at A$630 per gold ounce (with copper by-product credit) over the 17-year life (2024 dollars).
- Undiscounted free cash flow of A$5.7 billion would be generated over the 17-year life (using an average price of A$15,000/t for Cu and A$3,500/oz for gold).
- A forecast capital cost of A$1,783 million with an additional A$223 million of development and sustaining capital over the 17-year life.
- An estimated Net Present Value (NPV 7%, pre-tax) of A$1,808 million, estimated 24% Internal Rate of Return (IRR, pre-tax), with a Pre-Tax NPV to Start-up Capital ratio of 1.0.
Alkane’s next steps for the Boda-Kaiser Project will be:
- Conducting the baseline environmental monitoring and impact assessments that will be required for project approval in the future;
- Evaluation of the potential for sub-level caving or a similar bulk tonnage underground method;
- Further consideration of the potential routes for infrastructure to the project area, particularly for the supply of power and water;
- Ongoing metallurgical testwork and optimisation of the flowsheet;
- Continued engagement with local stakeholders;
- Continued exploration throughout the broader Northern Molong Porphyry Project area; and
- Continued evaluation of potential funding pathways and potential partners, the outcome of which will contribute to the selection of which development option to progress further into feasibility.
Alkane Managing Director, Nic Earner, said: “This scoping study shows that at current copper and gold prices a large mine and processing facility can be built at Boda-Kaiser with strong economic returns that could provide supply into global gold and copper markets – both highly attractive commodities with strong market fundamentals over the long term.
“There remains significant potential to add both to the overall resource with further exploration, and to the potential project economics with further examination of mining cost and method, particularly large-scale underground mining.
“Our focus over the next year at Boda-Kaiser is regional exploration, environmental studies, increasing our understanding of mining options and discussions with potential strategic partners.
“Alkane’s Board would like to thank the team of dedicated employees and consultants involved in the completion of this study.”
Alkane Investor Briefing Webinar
On 11 July 2024, Alkane conducted a live investor briefing to discuss the Boda-Kaiser Scoping Study.