Newcore Gold tanks as Enchi prefeasibility disappoints

Newcore Gold (TSXV: NCAU; US-OTC: NCAUF) fell to its lowest level in 17 months after a prefeasibility study (PFS) for its Enchi project in Ghana delivered underwhelming economics despite underlying metal prices being much higher since the previous technical report.

Shares of Newcore plunged 24% Wednesday in Toronto to 37¢, their lowest level since January 2025. The company’s market capitalization now stands at about $116 million (US$82 million).

Based on a base-case gold price of $3,800 per oz. and a 5% discount rate, Enchi has an after-tax net present value (NPV) of US$496 million and an internal rate of return (IRR) of 37%, Newcore said Wednesday. This represents a significant drop-off from the 2024 preliminary economic assessment (PEA), which pegged the NPV at $632 million and IRR at 92% under an “upside case” of $2,350 per ounce.

Enchi’s initial cost estimate has also tripled to US$351 million from US$106 million. The payback period remains at 1.6 years.

Nine years

The PFS incorporates drilling and technical work completed in 2024 and 2025, CEO Luke Alexander said.

According to a March resource, Enchi holds more than 83.6 million indicated tonnes grading 0.56 gram per tonne gold for 1.5 million contained oz., plus over 40 million inferred tonnes grading 0.49 gram gold for 626,000 contained ounces. Within this resource, covering four open-pit deposits, there are about 51.3 million tonnes of probable reserves grading 0.64 gram gold, for over 1 million oz. of contained gold.

The reserve base, as outlined in the PFS, would support more than nine years of operation, with average annual production of 104,000 oz. — in line with the PEA estimates. The life-of-mine operating cost, however, has more than doubled to $1,689/oz. — as has the all-in sustaining cost, to $2,290 per ounce.

While the PFS report also envisions as a conventional open-pit operation with standard milling and a carbon-in-leach plant, the rate of processing is now targeted at 5.5 million tonnes per annum, down from 8.1 million previously.

Growth focus

Vancouver-based Newcore would use the PFS as the basis on which to apply for a mining lease this year.”With a favorable and streamlined mine permitting process in Ghana, and a government that has shown strong support for project development, we will continue to drive development of Enchi toward production,” Alexander said.

Newcore will focus on high-grade opportunities to further expand Enchi’s size, scale and long-term value, the CEO added. According to Newcore, all existing deposits and targets on the property remain open along strike and at depth, with potential for resource growth in both shallow oxide and transition material as well as within the deeper fresh mineralization.

The resource estimated used in the study excludes “significant discoveries” achieved by drilling in 2026 as part of its ongoing 80,000-metre program, Chairman Doug Forster said.

Drilling at Enchi is continuing “with a focus on resource growth,” VP of exploration Greg Smith said.