In March 2009, Navigator published a Pre-Feasibility Study for the Leonora Gold Project which envisioned a 1Mtpa carbon-in-leach (CIL) operation, milling an average grade of 1.8g/t of gold, for an annualised gold production rate of 53,000oz over a six year mine life. This was based on a resource of 12.2Mt of ore at 1.9g/t gold, containing 742,000oz.
The study used an average gold price estimate of A$1,250/oz and determined that the Leonora mine would have a net cash cost of A$813/oz, generating A$389 million of net revenue, with a cash operating margin of A$129 million. The net present value (NPV) of the Project at this price level was estimated at A$43 million with an internal rate of return (IRR) of 32%. Financial analysis of the mine at a higher gold price of A$1,400/oz increased the net operating revenue to A$436 million, the cash operating margin to A$176 million, the NPV to A$66 million and the IRR to 44%. The capital costs for the Project were estimated to be A$45 million (including an A$5 million contingency). Capital costs could be significantly reduced by a custom milling arrangement – an option which Navigator is investigating.
The Pre-Feasibility Study envisages larger oxide-dominant open pit mines at Mertondale, Cardinia, Tonto-Eclipse and Raeside that deliver 1Mtpa ore to a centrally located CIL gold treatment facility at Merton’s Reward.
| Mertondale Prospect | Cardinia Prospect | Raeside Prospect |
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Progression of the Leonora Gold Project as a standalone operation is on hold until the results of the ore mining and processing trial are known.