Newcore Gold (TSX-V: NCAU; US-OTC: NCAUF) is advancing its 100%-owned Enchi project in Ghana toward a prefeasibility study after last year’s preliminary economic assessment (PEA) outlined a simple, low-capex open-pit heap-leach mine.
The company is midway through a 35,000-metre program to convert and grow resources, with a PFS targeted for release in the first half of next year, President and CEO Luke Alexander said.
“One simple way of looking at it is for every $100 move in the gold price, we add roughly $50 million of net present value (NPV) to the overall project,” Alexander said on the sidelines of the Precious Metals Summit last month.
The PEA’s economics boast an after-tax NPV (at a 5% discount) of $971 million (about C$1.4 billion), and a 136% internal rate of return (IRR) at a $3,000per oz. gold price. The study gives Enchi about an eight-month payback of the $106 million initial capital outlay.
The base-case at $1,850 per oz. gold returns an after-tax NPV of $371 million and a 58% IRR. The plan outlines average output of about 122,000 oz. annually over nine years, peaking at about 155,000 oz. in year six.
District scale gives the project room to run. Drilling has expanded targets including Kojina Hill – where Newcore last month reported 184 grams gold over 1 metre – and is now testing deeper high-grade shoots that could underpin a larger, longer-life scenario. The work comes as Ghana remains Africa’s top gold jurisdiction, and Newcore reports about C$10 million in cash with additional in-the-money warrants that could support completion of the PFS.
Watch the full interview below with The Northern Miner’s Western Editor, Henry Lazenby.
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