TG Metals (ASX:TG6) reports the results of a Scoping Study outlining near-term cash flow opportunities from low-cost heap leaching at its Van Uden Gold Project in Western Australia.
The study evaluates at-surface, gold-bearing laterite material as a potential low-cost production opportunity. The current laterite mineral resource estimate (MRE) contains 1.1 million tonnes (Mt) @ 0.52 grams per tonne gold (Au) for 17,700 ounces.
TG Metals notes that the study is based on 90% indicated mineral resources.
“The Scoping Study results show an excellent on-site processing pathway to production that can generate significant free cash flow in comparison to our market capitalisation at a low upfront capex,” CEO David Selfe says.
“This will, in turn, set up the Van Uden Project for further expansion both on the heap-leach proposal and into the Van Uden primary gold deposit.”
The study models a 250,000-tonnes-per-annum heap-leach operation over an initial three-year mine life, targeting 13,630 recovered ounces at 90% recovery.
Financial metrics include net revenue of $83.2 million and pre-tax free operating cash flow of $48.3 million. The company forecasts the all-in sustaining costs at $2,835 per ounce, with pre-production capital of $14.2 million, including contingency.
The study delivers a pre-tax net present value of $26.8 million, an internal rate of return of 121%, and a 12-month payback period. Assumptions include a gold price of US$4,400 ($6,270) per ounce.
Expansion opportunities include large-scale mineralised laterite targets outside the current MRE that are currently being drilled.
An additional 62,400 ounces of transitional material is considered prospective for heap-leach extraction. The material comprises 1.85Mt @ 1.05g/t Au and may be included in future development scenarios.
Column leach test work on three composite samples returned estimated gold extractions above 95% for two completed 4m columns, with an ongoing 2m column at 81.3%.
The Scoping Study is a preliminary technical and economic assessment completed to an accuracy of plus or minus 35%. It is insufficient to support the estimation of ore reserves, and there is no certainty the production targets will be realised.
Funding of about $15 million will likely be required, and there is no certainty the company can raise that amount when needed.
Van Uden is located 120km south of Southern Cross in WA’s Forrestania Greenstone Belt.
Key workstreams include resource expansion drilling and heap-leach metallurgical testing of transitional material. Environmental surveys, permitting, and upgrading the study to prefeasibility level are also underway.
TG Metals is an Australian explorer advancing a portfolio of gold and lithium assets.
Write to JC Villarba at Mining.com.au
Images: TG Metals
