The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Modest up-front spending to build BC gold-silver operation North of 60 Mining News – April 17, 2020
Drilling has outlined roughly 816,719 oz gold, 17.8 million oz of silver, 15.9 million lb of copper and 17.3 million lb of lead in three zones at Homestake Ridge.
Auryn's Homestake Ridge gold-silver project is near roads and powerlines, as well as a port to ship precious metal-rich copper and lead concentrates produced at a mine there.
Auryn Resources Inc. April 15 published results from a preliminary economic assessment that outlines a 900-metric-ton-per-day mining operation at its Homestake Ridge project in northwestern British Columbia that would produce 590,000 gold-equivalent ounces over a 13-year mine life.
The PEA demonstrates the project's potential to become a high-grade, small footprint, underground gold mine with positive economics and upside potential from both a rising gold price and prospective expansion.
At a base case of US$1,350/oz gold and US$12/oz silver, the mine envisioned in the PEA is expected to generate an after-tax net present value (5% discount) of US$108 million and 23.6% internal rate of return.
At US$1,755/oz gold and US$16.50/oz silver, which are closer to current precious metals prices, the Homestake mine outlined in the scoping level study is estimated to generate an after-tax NPV (5% discount) of US$206 million and an IRR of 35.8%.
Being a relatively small underground operation, the PEA estimates that the pre-production capital costs to develop the mine to be only US$88 million (C$126 million), which includes a 15% contingency on all direct costs.
The all-in sustaining cost for gold is expected to be US$670/oz, when you factor in the US$102 million of byproduct silver, copper and lead that will also be produced at Homestake.
The low start-up costs and production costs means that, at the base case metals price scenario, the operation envisioned in the PEA would payback capital costs in three years.
"This is an early look into the Homestake Ridge high-grade gold project's current value, which demonstrates a highly profitable deposit with a low capex in an established mining jurisdiction, and importantly, it is open for considerable expansion," said Auryn Resources Executive Chairman Ivan Bebek.
Currently, the Homestake project hosts an estimated 816,719 oz gold, 17.8 million oz of silver, 15.9 million pounds of copper and 17.3 million lb of lead in three zones – Homestake Main, Homestake Silver and South Reef.
Homestake Main, the most advanced of the three, hosts 736,000 metric tons of indicated resource averaging 7.02 grams per metric ton (165,993 oz) gold, 74.8 g/t (1.8 million oz) silver, 0.18% (2.9 million lb) copper and 0.08% (1.3 million lb) lead; plus 1.75 million metric tons of inferred resource averaging 6.33 g/t (355,553 oz) gold, 35.9 g/t (2 million oz) silver, 0.35% (13.3 million lb) copper and 0.11% (4.1 million lb) lead.
Homestake Silver, the largest zone in terms of tonnage, hosts 3.35 million metric tons of inferred resource averaging 3.13 g/t (337,013 oz) gold, 146 g/t (15.7 million oz) silver, 0.03% (2.2 million oz) copper and 0.18% (2.2 million lb) lead.
South Reef, which has excellent expansion potential, hosts 445,000 tons of inferred resource averaging 8.68 g/t (124,153 oz) gold and 4.9 g/t (roughly 70,100 oz) silver, along with small amounts of copper and lead.
In addition to resource expansion around these three zones, Auryn has identified promising exploration potential at Bria, an exploration target about six miles (10 kilometers) northeast of the zones included in the PEA, and Kombi, which is about 2.2 miles (3.5 kilometers) south of the Homestake Ridge resource area.
"The Homestake Ridge gold project is a valuable part of our portfolio, which also includes multiple tier-one exploration opportunities, such as Sombrero and Curibaya in southern Peru and Committee Bay in northern Canada," said Bebek. "We are very much looking forward to advancing our portfolio as we continue to see improving metal prices."
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
Reader Comments(0)