Santana Minerals' Bendigo-Ophir Gold Project Pre-Feasibility Study Reveals Strong Potential
SMI (SMI) Share Update November 2024 Thursday 14th
Santana Minerals Unveils Promising Bendigo-Ophir Gold Project Study
Santana Minerals Limited has released a pre-feasibility study for its Bendigo-Ophir Gold Project, highlighting significant economic potential and robust returns.
Instant Summary:
- A$1.06 billion NPV after tax
- 68% internal rate of return (IRR) after tax
- Less than one year payback period
- A$340 million required for pre-production cash drawdown
- Projected 150,000 ounces of gold production annually in the first two years
Overview of the Bendigo-Ophir Project
The Bendigo-Ophir Gold Project, located in New Zealand, is poised to become one of the country's richest gold mines. According to Santana Minerals' pre-feasibility study (PFS), the project boasts a net present value (NPV) of A$1.06 billion after tax and an impressive internal rate of return (IRR) of 68%.
The study outlines a production target of 1.15 million ounces of gold over a 9.2-year mine life, with an average production rate of 125,000 ounces per year. The project is expected to achieve a payback period of less than one year from the start of production.
Financial and Operational Highlights
The PFS estimates a total pre-production cash drawdown of A$340 million, with a C1 cash cost of A$66.4 per tonne milled and an all-in sustaining cost (AISC) of A$1,416 per ounce. The project is projected to generate A$4.6 billion in revenue and A$1.8 billion in free cash after tax.
Environmental and Strategic Considerations
Santana Minerals emphasizes its commitment to responsible mining practices, with a focus on environmental sustainability. The project has been designated as nationally and regionally significant by the New Zealand government, which could facilitate fast-track approval processes.
Future Prospects and Expansion
While the current PFS does not include growth potential, Santana Minerals has identified approximately 770,000 ounces of inferred resources that could be converted to reserves, offering further upside to the project's economic profile.
The release of the pre-feasibility study is likely to have a positive impact on Santana Minerals' stock, as investors are drawn to the project's strong financial metrics and rapid payback period. The high IRR and significant NPV suggest robust economic viability, which could enhance investor confidence and attract additional funding.
Investor Reaction:
Analysts are expected to react positively to the study's findings, given the project's strong financial returns and strategic significance. However, securing the necessary funding and obtaining required permits remain key challenges that investors will closely monitor.
Conclusion:
Investors should consider the Bendigo-Ophir Gold Project's potential as a lucrative opportunity within the gold mining sector. As Santana Minerals progresses towards detailed construction planning, stakeholders are encouraged to stay informed on developments and assess the project's impact on their investment strategies.