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New Murchison Gold Limited (ASX: NMG) (“NMG” or the “Company”) is pleased to announce an Ore Reserve Estimate (ORE) for the Crown Prince Deposit (Crown Prince) at the Company’s flagship Garden Gully Gold Project near Meekatharra, Western Australia.
HIGHLIGHTS
- New Murchison Gold Limited (ASX:NMG) is pleased to announce the results of a Feasibility Study into the Crown Prince Gold Deposit (Crown Prince Feasibility Study) in WA which outlines pre-tax cash flow of $226m (undiscounted) over a period of 30 months at current spot gold prices (A$4,385/oz).
- Capital expenditure required to commence production of $5.4m is very low relative to peer gold projects given the Company’s Ore Purchase Agreement (OPA) with Westgold Resources Limited (WGX or Westgold).
- NMG is also expecting to be able to utilise its substantial tax loss position (30-Sep-24: $84.4m in accumulated losses, $76.4m usable)1 to offset tax liabilities on initial pre-tax profits from Crown Prince.
- 140koz contained ounces of gold are to be mined and trucked to WGX over 30-month open pit.
- Upside in potential underground mine below the pit, which will be studied in 2025.
- NMG’s production plan is based on Ore Reserves only. Contained ounce production profiles in the study comprise only that material delineated in Ore Reserves (estimated using a A$3,250 /oz gold price assumption) for the project.
- Commencement of mining is expected in June 2025 with first ore sales scheduled in August 2025. Mining and environmental approval documentation was submitted to relevant regulators and counterparties in late 2024.
- The Crown Prince Feasibility Study (FS) was completed in January 2025 and demonstrates sound financial returns based on:
- An updated Mineral Resource Estimate (MRE) of 2.205Mt @ 3.Gg/t for 27Gkoz2
- An Ore Reserve estimate for Crown Prince Project of 0.8G million tonnes @ 4.8g/t gold (Au) containing 140,000oz Au.
- Crown Prince ore sold at the mine gate under an Ore Purchase Agreement (OPA) for haulage to Westgold’s Bluebird Mill south of Meekatharra.
- Production from the Crown Prince Open Pit only, which is covered by the granted mining leases.
- Next steps to expand the resource base are to assess Crown Prince underground potential and other deposits including Lydia and New Murchison King. These were not considered in the FS.
- The FS Life of Mine (LOM) production schedule metrics are shown on Table 1. Financial results with sensitivity to gold price, are shown in Table 2. Summary of LOM Cash Flow is shown in Figure 1.
Table 1: Production Schedule Metrics – Crown Prince Open Pit
Table 2: Financial Results (AUD)
Click here for the full ASX Release
This article includes content from New Murchison Gold Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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New Murchison Gold Limited
Investor Insight
For investors with an eye on mining stocks, New Murchison Gold (ASX:NMG) presents a unique opportunity. The company's shallow, high-grade Crown Prince gold deposit, significant land package in the prolific Murchison goldfields, and strategic alliance with established Australian gold producer Westgold Resources position it as a noteworthy contender in the Western Australian gold exploration space. As NMG continues to navigate the path to production, its journey is one that astute investors will watch with keen interest.
Overview
Within the heart of Australia's Murchison gold district, a region host to more than 35 Moz gold endowment (historic production and current resources), stands New Murchison Gold, a forward-thinking gold explorer with a clear strategy to maximise shareholder value driven by a highly experienced management team. The company’s value proposition centres on growing and de-risking its shallow, high-grade Crown Prince gold deposit (part of the company’s Garden Gully gold project) and a strategic alliance with established Australian gold producer Westgold Resources (ASX:WGX), offering a clear pathway to production and cash flow generation.
The Westgold alliance has resulted in a binding ore purchase agreement with Big Bell Gold Operations, a wholly owned operating subsidiary of Westgold Resources. The agreement will underpin production from NMG’s Crown Prince deposit in 2025, and will see the company delivering 30 kt to 50 kt of ore to Westgold per month.Key Project
Garden Gully
New Murchison Gold's flagship Garden Gully gold project is located 20 km northwest of Meekatharra, Western Australia. The project boasts a 677 sq km tenement package that covers the Abbotts Greenstone Belt. The project includes granted mining leases and Native Title agreements in place over the Crown Prince, Abbotts and Lydia prospects. Garden Gully is in close proximity to a number of operating gold mines and existing gold processing facilities.
New Murchison Gold has a strong pipeline of exploration and development prospects at Garden Gully, with the most advanced being Crown Prince.
Crown Prince deposit
The Crown Prince deposit has an updated mineral resource estimate of 2.2 Mt at 3.9 g/t gold for 279 koz, which includes an indicated resource estimate of 226 koz at 4.6 g/t Au. (81 percent of the total MRE). The total also includes the maiden resource for the Southeastern Zone (SEZ) of 1 Mt at 5.2 g/t gold for 164 koz (discovered in late 2022).
The resource is shallow, delineated from surface, remains open at depth and along strike, and located within a 300 m x 200 m area demonstrating strong open pit mining potential. There is significant resource growth potential at new mineralised zones at the northeastern end of SEZ and Crown Prince East (350 m from SEZ).
New Murchison Gold also published strong metallurgical performance from advanced test work at Crown Prince with high recovery of gold through gravity and cyanide leach test work, reporting overall gold recovery rates ranging from 98.2 to 99.8 percent.
Recent high-grade gold intersections at SEZ
Westgold Strategic Alliance
New Murchison Gold announced a strategic alliance and $6 million placement with Australian gold producer Westgold Resources.
The Westgold transaction provides a clear pathway to commercialising Crown Prince in a strong gold price environment, validates the quality of the deposit and enables New Murchison Gold to leverage Westgold’s internal resources, intellectual property and infrastructure to accelerate development.
The primary aim of the strategic alliance is to fast track the development of New Murchison Gold’s Crown Prince deposit into production. As part of the strategic alliance, New Murchison Gold and Westgold has entered into a binding ore purchase agreement (OPA) with Westgold subsidiary Big Bell Gold Operations, for gold produced at Crown Prince. Under the agreement, NMG will deliver 30 kt to 50 kt of ore to Westgold per month with no fixed term. Crown Prince is located only 33 km from Westgold’s 1.6 – 1.8 Mtpa Bluebird Mill.
In addition to the OPA, the strategic alliance may also encompass other strategic collaboration initiatives such as access to Westgold’s expertise and infrastructure. Upon completion of the strategic placement, Westgold will be an 18.7-percent shareholder (undiluted basis) and have the right, but not the obligation to a New Murchison Gold board seat and an equity participation right.
Proceeds from the strategic placement and current cash will allow New Murchison Gold to fast track further resource development, project development and mining proposal workstreams at Crown Prince and continue systematic regional exploration across Ora’s commanding 677 sq km tenure.
Major players are increasingly partnering with junior explorers to secure access to high-grade, quality gold resources. New Murchison Gold's collaboration with Westgold epitomises this movement, setting a blueprint for mutual success in the industry.
Key Focus
The near-term focus for New Murchison Gold will be further resource growth and rapidly advancing project development and mining proposal workstreams at Crown Prince:
- Crown Prince Drilling: Further delineating new high-grade mineralised zones at the north-eastern end of SEZ and Crown Prince East (350 metres from SEZ) and resource definition drilling along strike and below 100 metre vertical depth
- Crown Prince Resource: Updated Mineral Resource Estimate expected in September of 2024.
- Crown Prince Development: progress detailed technical programs, preliminary project development and mining proposal workstreams and agree on an ore purchase agreement and other strategic collaboration initiatives with Westgold
- Regional: Continue systematic regional exploration programs across Ora’s commanding 677 sq km tenure package
Management Team
New Murchison Gold is led by a team of experienced professionals with a diverse set of skills and expertise. At the helm of the company's operations is CEO Alex Passmore, a qualified geologist with extensive corporate finance experience to guide New Murchison Gold's strategic plan. The board is chaired by Rick Crabb, with extensive experience in the legal and mining sectors providing invaluable governance and oversight.
Supporting the company's governance structure, Malcolm Randall serves as a non-executive director, bringing a wealth of knowledge from his tenure in the resource sector, including 25 years at Rio Tinto. Frank DeMarte, director and company secretary, contributes over 39 years of mining industry experience in areas of financial management governance and secretarial practice.
The collective experience of New Murchison Gold's board and management is a cornerstone of the company's success, positioning it to capitalise on the opportunities within the Garden Gully project and beyond.
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