Junior explorer Vertex Minerals (ASX:VTX) has published a Pre-Feasibility Study (PFS) for its Reward Gold Project in New South Wales, highlighting an ‘attractive mine development opportunity’.
The study forecasts that over a 3-year mine life, the project could generate some $150 million in revenue through gold production of 49,890 ounces.
Vertex predicts all-in sustaining costs (AISC) of $1,712 per ounce and pre-production capital expenditure of $28.5 million, with a project pre-tax net present value of $28.3 million and internal rate of return of 77%.
The PFS assumes that Vertex, which has a $9 million market capitalisation, will process 181,000 tonnes of material at a head grade of 9.3 grams per tonne (g/t) gold over the life of the mine.
This all translates to pre-tax cashflow of just under $36 million.
The Reward mineral resource estimate (MRE) currently sits at 419,000 tonnes @ 16.72 g/t gold for 225,000 ounces of contained gold, but of this, only 70,500 ounces of gold sits in the ‘indicated’ category, with the remaining 154,700 ounces in the ‘inferred’ category.
As such, Vertex says the conversion of inferred resources to indicated resources through further drilling could ‘significantly’ enhance the project’s key financial metrics.
Further, the company says the delivery of the PFS justifies the development of a mine plan that could ‘significantly’ enhance Vertex’s ability to upgrade the inferred resources by way of improved access, which also allows for more effective exploration in the project area.
Vertex believes that further exploration success could help increase the Reward project’s mine life.
Executive Chairman Roger Jackson says the new PFS showcases the attractiveness of Reward as a mine development opportunity.
“In determining the parameters for this study, the decision was taken to base the projected figures on the indicated resource achieved to date.
“The board remains firmly of the view that this is the most commercially prudent way to develop the mine”
The board remains firmly of the view that this is the most commercially prudent way to develop the mine, given the cost and logistical benefits that can be achieved by carrying out further drilling from underground alongside mining activities.”
Jackson adds that the PFS figures already demonstrate the ‘strong projected economics’ of the Reward mine and its ‘clear potential’ for further resource upgrades as mining operations get underway.
The Reward mine forms part of Vertex’s Hill End and Hargraves Project in New South Wales, which covers an area of 155km-square and comprises 7 granted exploration licences and 10 mining leases.
Vertex also owns the Taylor Rock Project and the Pride of Elvire Project in Western Australia.
Write to Joshua Smith at Mining.com.au
Images: Vertex Minerals
