Marquee Resources

Preliminary Economic Assessment (PEA) Study Completed Lone Star Project

Marquee Resources Limited (ASX:MQR) are pleased to announce the completion of a Preliminary Economic Assessment( PEA) on the Lone Star Copper Gold Project, Washington State, USA (“Lone Star” or “The Project”).


Key Highlights:

  • PEA Study Assignment: Mining Plus (USA and Australia) tasked with completing a Preliminary Economic Assessment (PEA) for Lone Star in April 2023.
  • Mineral Resources: Lone Star's Mineral Resource Estimate (MRE) includes Indicated 9.76 Mt at 0.60% CuEq and Inferred 3.35 Mt at 0.44% CuEq, based on a 0.10% CuEq cutoff within a conceptual pit shell.
  • Financial Drivers for MRE:
    • Copper Price: US$ 4.10/lb
    • Gold Price: US$ 1,750/oz
    • Copper Selling Cost: US$ 0.10/lb
    • Gold Selling Cost: US$ 50/oz
    • Recovery Rates: 90% for both Copper and Gold
    • Mining Cost: US$ 2/t
    • Processing Cost: US$ 7/t
    • Exclusions: Transportation costs from mine to mill, from mill to refinery, and a portion of mining operating cost (US$ 1.40/t).
  • Key Conceptual Outcomes:
    • Life of Mine (LOM): 14 years
    • Peak Production: Years 11-14
    • Average Production: 1.09 Mtpa over LOM, totalling 14.1 Mt at 0.37% Cu and 0.22g/t Au.
  • Copper and Gold prices are key to financial model, with prices considered valid for Base Case, however, project is sensitive to increased metal prices.
  • Mining Operating Cost: US$ 3.24/t based on Open Pit Engineers (Canada Team) and benchmarking.
  • Processing Cost: US$ 14.49/t as advised by Sedgman Canada.
  • Economic Implications: Copper and Gold prices are primary financial drivers; optimistic scenarios show improved results with higher metal prices.
  • Treatment Approach: Toll treatment remains preferred for Lone Star due to high initial capital costs for on- site treatment.
  • Financial Outcome: NPV: Negative US$ 123.9m and IRR: Negative 10.2%. However, increased metal prices have significant effect on bottom line.
  • Recommendations: Further investigation into ore sorting suggested.
  • Discount Rate Impact: NPV varies with discount rate; significant impact on metal price optimistic scenarios but negligible in Base Case.

The Company’s Executive Chairman Charles Thomas commented:

"While the Base Case results of the Preliminary Economic Assessment (PEA) for the Lone Star Project are not positive at this stage, we at Marquee Resources are excited about the initial glimpse it offers into the potential of the Lone Star Project as a future copper-gold producer," he stated.

“The current results are just a starting point, and there's considerable scope for improvement. We are actively exploring several avenues for enhancement. With the anticipated upswing in copper and gold prices in the near future, we're confident that the project's financial outlook will turn favourable. Our team is currently evaluating additional near mine and deeper exploration targets. Furthermore, we're looking into a number of promising opportunities like Ore Sorting, which we believe could significantly reduce transportation and processing costs."

"I would like to extend my thanks to the Mining Plus project team across the USA and Australia for their dedication in creating a high-quality study. Their work marks a positive and encouraging step forward, laying the groundwork for Marquee to develop a clear and strategic pathway for the Lone Star Project. There is a sense of optimism and forward- looking determination to enhance the project, underlining the company's commitment to unlocking the project's full potential.”


Click here for the full ASX Release

This article includes content from Marquee 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.

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