Hycroft Mining‘s (NASDAQ:HYMC) Hycroft Mine in Nevada has a post-tax net present value (NPV) of US$10 billion ($14 billion) and an internal rate of return of 30.1%, based on a technical report.
The report — which outlines the economics and mine plan for the milling operation using conventional pressure oxidation and heap leach processing — demonstrates that Hycroft hosts a ‘large-scale’, long-life precious metals project.
Hycroft has a 51-year mine life, with an average annual production of 204,000 ounces of gold and 6.8 million ounces of silver. In the first 10 years, the project is expected to average more than 330,000 ounces of gold-equivalent.
Over the entire mine’s life, Hycroft is expected to produce 10.4 million ounces of gold and 347.5 million ounces of silver.
At base case commodity prices of US$3,600 an ounce for gold and US$48 an ounce for silver, the project has a post-tax payback period of 4.7 years and a gross revenue of US$54.2 billion.
The company notes that for every US$100 increase in gold price per ounce, the post-tax NPV increases by US$300 million. Meanwhile, for every US$5 increase in silver price per ounce, the post-tax NPV increases by US$460 million.
Scale, quality, and potential
CEO Diane Garrett says the technical report confirms the scale, quality, and long-term potential of the mine.
“The project delivers strong economics and significant leverage to rising gold and silver prices, reinforcing Hycroft’s position as one of the sector’s most compelling large-scale development opportunities, located in a tier one jurisdiction,” Garrett says.
“By advancing the high-grade Brimstone and Vortex silver systems, we see a clear path to further improving project economics and unlocking additional value.
“The Hycroft land package remains a highly prospective environment, and we believe we are only at the beginning of demonstrating its true potential.”
Plans at Hycroft
The company is planning to conduct further drilling to reclassify waste and inferred gold and silver resources to measured and indicated categories, enabling integration into future mine plans.
Hycroft also intends to combine underground mine options alongside the open pit, benefiting from large-scale production and bringing ‘high-grade’ ounces forward earlier in the mine life.
In addition, there is potential to extend the mine’s life or expand production by processing stockpiled low-grade mill feed material within the current mine plan.
The current mineral resource comprises less than 15% of the 64,000-acre land position as the Hycroft system remains open in all directions and at depth.
Drilling is currently underway, with two core drill rigs at Brimstone and Vortex. Two additional rigs will be added over the next quarter to expand and define these two systems, which remain open in all directions and at depth.
Roasting testwork is pending as an alternative processing option, which could potentially enhance project economics. This includes adding a potential third revenue stream from the by-product production and sale of sulphuric acid.
Hycroft Mining is a US-based gold and silver explorer and developer focused on its namesake mine located in northern Nevada.
The Hycroft Mine has a resource of 16.4 million ounces of gold and 562.5 million ounces of silver in the measured and indicated categories, as well as an inferred resource of 5 million ounces of gold and 132.8 million ounces of silver.
Write to Aaliyah Rogan at Mining.com.au
Images: Hycroft Mining
