Novo Resources has tabled a “preliminary economic assessment” over its Beatons Creek conglomerate gold mine in WA. Figures from the study underline the profitability of leading-edge discovery, with the mine set to produce more than 100,000 ounces of gold per annum at a cash cost of US$702 per ounce, delivering an extremely healthy profit over a projected 6-year mine life.
TSX-listed gold producer, Novo Resources has tabled a preliminary economic assessment, or “PEA” over its Beatons Creek conglomerate gold mine in Western Australia which revealed remarkably cheap production costs and robust economics.
Having already poured its first gold from the lucrative mine, numbers from the study underline the profitability of the leading-edge discovery. The operation is set to produce more than 100,000 ounces of gold per annum at a cash cost of around US$700 an ounce, delivering a healthy profit over its initial 6-year mine life.
Additional eye-catching figures from the PEA includes a Net Present Value of US$318 million and an EBITDA tracking at US$88 million. With the current gold price hovering around US$1,700 per ounce, the mine’s All In Sustaining Costs of US$974 provides plenty of breathing room for profitable operations.
Novo Resources Chairman, Dr Quinton Hennigh said:“The PEA indicates the potential viability of mineral resources at Beatons Creek, with a competitive AISC of US$974/oz. Given the expansive nature of gold-bearing conglomerates in the Nullagine region, there is the potential for the resource base to grow through step-out exploration and support an extension to the LOM. The robust anticipated cash generation reported by the PEA should support Novo’s exploration activities across its vast holdings in the Pilbara, with further potential to grow production organically.”
Interestingly, whilst the PEA is based on mining a total of 9.5 million tonnes of ore from the Beatons Creek discovery, the company’s growing inventory already contains a global resource of close to 11 million tonnes grading 2.53 gram per tonne gold - recent exploration indicates that this resource looks set to grow further.
The company’s latest drill program has outlined the lateral extensions to the conglomerate gold deposits at Beatons Creek and revealed the gold-rich host units extend for several kilometres along strike from the existing mining operation.
The innovative Novo is now looking to ramp up exploration across its 1,250 square kilometre ground holding surrounding its Beatons Creek operations. Whilst the developing mine is set to occupy a 2km-by-2km footprint, the regional gold potential at Nullagine hints that the projected 6-year mine life may simply be the tip of the iceberg.
Novo Resources is pioneering the development of conglomerate-hosted gold mineralisation in Western Australia’s Pilbara region and is Australia’s first modern producer of conglomerate gold. The Beaton Creek conglomerate discovery is located immediately to the west of the established gold mining centre at Nullagine, around 250km south-east of Port Hedland and is the first of Novo’s diverse range of projects across the Pilbara to be developed.
Ore mined from the Beaton Creek gold deposits is trucked 14km south to the company’s Golden Eagle mill, which was recently refurbished by Novo following the purchase of Millennium Minerals in 2020. The gold-rich feed is delivered to the ore pad before being crushed and ground to less than 150 microns prior to being subjected to gravity separation and later cyanide leaching.
Early-stage mining and milling operations at Nullagine are already coming up trumps, producing an impressive 95 per cent recovery of gold from the Beaton Creek conglomerate ores. However, this new style of mineralisation is likely to deliver more than a few surprises as mining begins probing some of the more “nuggety” and high-grade portions of the deposit in the coming months.
Aside from its mining success, Novo’s recent conglomerate gold discovery at “Skyfall”, just 2km from the Beatons Creek mining area, also has the potential to steal a few headlines in the months ahead and may add more ounces into Novo burgeoning Pilbara gold inventory.
With Novo’s PEA underlining the economics of the Beaton Creek operation and gold already pouring from the Golden Eagle plant, the company is now writing its own pages into the rich mining history of WA’s Pilbara region.
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