Scoping study on Alt Resources’ Mt Ida gold asset reveals ‘robust’ and ‘low cost’ operation
Alt Resources (ASX: ARS) has emerged from a trading halt with results of its Mt Ida scoping study, which has confirmed the gold project’s potential for a “robust” “low cost” open pit gold operation.
Alt Resources’ Mt Ida scoping study forecasts a six-year EBITDA of $102.2 million.
The scoping study included the Bottle Creek, Quinn’s and Mt Ida South deposits, which form part of the wider Mt Ida project in Western Australia’s eastern goldfields.
Underpinning the scoping study is a resource of 2.98 million tonnes at 2 grams per tonne gold and 15.1g/t silver.
Capital expenditure to develop an initial six-year 500,000tpa operation was estimated at $30 million to produce 181,200 ounces of gold and 937,800oz silver over the six years.
The study anticipates the operation would become cashflow positive within the first year of production and generate earnings before interest tax depreciation and amortisation of $54.4 million in the first three years, with $102.2 million anticipated over the entire six years.
This is based on estimated all in sustaining costs of A$1,100-A$1,200/oz.
Alt also noted there was “significant scope” to grow the mineral resource and proposed mine life by discovering further deposits within its tenement package where reverse circulation and diamond drilling is continuing.
Commenting on the scoping study, Alt chief executive officer James Anderson said the results “provided a clear indication” of Mt Ida’s “inherent value proposition”.
“I wanted to demonstrate to funders that a value proposition exists for investment whereby a smaller scale gold project can be developed and deliver solid returns with significantly less capital exposure and risk for funders.”
“There is a current mindset and funding model whereby you must have 1Moz and be able to produce 100,000oz a year, which is not always sustainable.”
“Bigger is not always better, which is clearly evidenced by the recent failure of Gascoyne and others and I think the Mt Ida and Bottle Creek scoping study using reasonable assumptions has done that,” Mr Anderson noted.
He added the project had “clear potential” for “significantly” increased cashflow through increases in mine life, which the company hopes to boost through ongoing exploration and potential project acquisitions.
All up, Alt has firmed up a mineral resource at the 360 square kilometre project of 6.8Mt at 1.9g/t gold for 406,000oz of contained gold and 3.78Moz of silver.
Meanwhile, Mr Anderson also pointed out the processing plant has been designed to be readily scalable at a low cost.
“Our strategy has always been to continue drilling and exploring aggressively to grow the mineral resource to feed a plant and we will deliver our feasibility study hopefully by the end of the year.”
Exploration success at Tim’s Find
As part of the company’s strategy to continue with aggressive exploration, in recent weeks, Alt has unearthed numerous high-grade gold intersections at the Tim’s Find prospect.
To-date, Alt has competed 3,000m of RC drilling at Tim’s Find with gold intersected in 63 out of 73 holes drilled.
In the latest assay batch, notable results were 2m at 32g/t gold, including 1m at 62.9g/t gold from 26m; 2m at 19.95g/t gold from 42m; 4m at 9.6g/t gold from 17m; and 11m at 4.86g/t gold including 2m at 24.68g/t gold from 22m.
These latest positive results follow on from Orior Capital’s rating that Alt was a “compellingly cheap” value proposition with a multi-million ounce gold opportunity.
“Investors can look forward to strong news flow as we continue to drill aggressively and deliver results from outside the current resource inventory adding value for our shareholders,” Mr Anderson added.
Article from Smallcaps (July 29, 2019)