Australian miner St Barbara (ASX: SBM) announced on Tuesday the completion of a prefeasibility study giving its 15 Mile gold project, in Trafalgar, N.S. pre-production capital costs of A$207 million ($182 million).
The study estimated a post-tax net present value of $172.8 million and a post-tax internal rate of return (discount rate 5%) of 20.3%, using a long-term gold price of US$1,700 per ounce. The company’s market capitalization stands at A$155.4 million ($135.6 million).
The project, located about 40 km northeast of St Barbara’s producing Tuoquoy mine is expected to have an all-in sustaining cost of US$992 per oz. and could produce between 55,000 and 60,000 oz. per year over an 11-year mine life.
The study was based on an ore reserve of 618,000 oz. of contained gold and a mineral resource of 836,000 oz. of contained gold.
“With this strong PFS result, St Barbara will now focus on preparation of an updated environmental and social impact assessment for this new standalone design of the 15 Mile project,” said CEO Andrew Strelein.
The company faced the risk of suspension at Tuoquoy last year as it waited for provincial government approval to raise the height of its tailings dam so it could extend operations until end of 2023. St Barbara also has operations in Papua New Guinea and Australia.
Shares of the miner rose 5% to A19¢ in Sydney on Tuesday, in a 52-week range of 17¢ and 93¢
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