Menzies And Laverton Gold Project Mine Restart Study

Brightstar Resources Limited (Brightstar or the Company) (ASX: BTR) is pleased to announce the results of a positive Scoping Study from the +1Moz combined asset base (the “Project”) at the Menzies & Laverton Gold Projects located in WA’s Goldfields region.

Highlights:

• Positive mine restart study completed for the development of the 100%-owned Menzies and Laverton Gold Projects in Western Australia
• Initial mine production target of approximately 5.28Mt @ 2.00g/t Au for 322,617 oz over approximately 8 years
• Average recovered ounces of +45koz pa in first five years, with average LOM production of ~40kozpa and strong potential to increase production profile and mine life
• The staged mine plan provides early cashflow from the Menzies Gold Project to organically fund the restart of the Laverton Gold Project
• Total project pre-production capital of approximately $22 million
• Rapid restart with first Menzies gold within six months of mining commencement and first Laverton gold within nine months from the commencement of processing plant upgrades
• Study highlights robust financials and a competitive cost profile utilising conservative pricing assumptions and current cost environment:
  • Net Present Value (unlevered, pre-tax, 8%) of approximately A$103 million using a gold price of A$2,900/oz
  • Pre-tax internal rate of return (IRR) of approximately 79%
  • NPV8 at current spot gold price (A$3,000/oz) of approximately A$128m and IRR of approximately 106%
  • Payback period of approximately 1.5 years, underpinned by 70% of material processed being Measured and Indicated Mineral Resources
  • All-In Sustaining Costs (AISC) of approximately A$2,041/oz
• Strong returns on investment driven by low capital start-up metrics delivers a readily fundable project development:
  • NPV / Capex ratio of approximately 4.6x
  • Capital Intensity of A$559/oz
    (pre-production capital divided by annual gold production)

The staged mined development has been optimised to minimise up-front capital costs, utilising operational cash flow to organically fund the refurbishment of the Laverton processing facility to minimise equity dilution and limit onerous debt and/or hedging exposure associated with large capex builds magnifying commissioning risks. The mine plan has been designed to minimise risks associated with ramp up and deliver a profitable gold producer in WA with significant upside to expand on the production profile and mine life.

More importantly, when assessing key financial metrics for the return on investment in a challenging capital environment, the development of these gold projects is peer-leading in the WA gold development sector. Key profitability metrics such as internal rate of return (IRR) and a ratio of the net present value divided by the capex (NPV/capex) are exceptional and speak to the development ethos being employed by Brightstar to ensure that this project is appropriately fundable and mitigating all operational risks where possible.

Whilst we’re pleased to release the results of our Scoping Study and are progressing with a pre-feasibility study, we continue to advance exploration efforts across the portfolio with the intent of finding additional ounces to add to the mine plan. We look forward to continuing our dual focus of development and exploration in the Goldfields, and building WA’s next gold producer.”

Click here for the full ASX Release

This article includes content from Brightstar Resources, 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.