The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
3.3M oz operation generates a 42% IRR and C$1.17 billion NPV North of 60 Mining News – April 28, 2023
An inukshuk sits on a rise overlooking the Colomac camp on Nighthawk's Indin Lake property in Northwest Territories.
Keyvan Salehi
Nighthawk Gold Corp. April 26 published results from a preliminary economic assessment that details very strong economics for a mine at its Colomac project in Northwest Territories that would produce 3.26 million ounces of gold over 11.2 years of operation.
The PEA envisions a "hub-and-spoke" mining operation with a 17,000-metric-ton-per-day mill located at Colomac Centre, where most of the resources are located, with ore from satellite deposits across the 359-square-mile (930 square kilometers) Indin Lake property to the hub mill.
This gold mine is based on a resource calculated earlier this year that included an expansion of Colomac Centre and a maiden resource for four satellite deposits across the wider Indin Lake property – Kim, Cass, Treasure Island, and Damoti.
According to the latest calculation, Colomac Centre hosts 59.8 million metric tons of open pit indicated resource averaging 1.45 grams per metric ton (2.8 million oz) gold and 10.73 million metric tons of open pit inferred resource averaging 2.32 g/t (802,000 oz) gold; plus 10.49 million metric tons of underground indicated resource averaging 1.73 g/t (584,000 oz) gold and 13.53 million metric tons of underground inferred resource averaging 2.05 g/t (899,000 oz) gold.
The four satellite deposits host 24.3 million metric tons of inferred resource averaging 2.17 g/t (1.69 million oz) of gold.
Based on this resource, the PEA outlines plans for a mine at Colomac that would produce an average of 290,000 oz of gold annually.
At a base case price of US$1,600/oz gold, this operation is expected to generate an after-tax internal rate of return of 42% and an after-tax net present value (5% discount) of C$1.17 billion (US$860 million).
It is expected to only take 2.1 years to pay back the estimated C$654 million (US$480 million) in capital expenditures to build this mine.
"The results of our PEA demonstrate that the Colomac Gold Project has the potential to be a phenomenal asset, and the PEA is a monumental milestone for our company," said Nighthawk Gold President and CEO Keyvan Salehi. "Only a handful of gold projects in the world (that are owned by junior gold companies) have similar favourable economics with the potential to deliver approximately 300,000 oz of annual gold production over a 10-year mine life and achieve an NPV5% to initial capex ratio close to 2.0. As such, we believe our project belongs to this rare class of global gold assets and that there is runway for the project to continue to grow as we start exploring for other meaningful deposits across our massive greenstone property."
The company plans to continue to pursue this growth potential with a 20,000- to 25,000-meter drill program slated for this year that will focus largely on the expansion of the higher-grade, satellite deposits such as Cass and Damoti, as well as the 24/27 deposit in the Colomac Centre area.
"We have an exciting rest of the year ahead of us," said Salehi. "In the near term, we are expecting assay results from the highly prospective Leta Arm Zone. "We are also planning to further drill the Cass, 24/27, and Damoti deposits, which we believe have the potential to expand mineralization beyond what has been outlined in the PEA."
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.
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