Mutiny Gold has cut 32 per cent off the capital cost of its Deflector project as it seeks to revive interest in the development two weeks after its major funding partner walked away.
The South Perth-based company said an updated feasibility study had cut the start-up capital costs from $91 million to $62 million while maintaining production volumes and incurring only a small increase in operating costs.
Key changes include leasing an existing camp in Morawa rather than expanding the mine camp, and using contract crushing rather than building a new crushing circuit.
It has also reduced pre-production open-pit mining from six months to three months.
The feasibility study excludes the $22 million cost of underground mine development and $8 million of process plant and mill upgrades, to be undertaken in year three of the project.
The company said these would be funded out of operating cash flow and were not part of the start-up capital.
The feasibility study is based on initial production of 68,000 ounces of gold per annum from the open pit operation, rising to 88,000oz/pa after the upgrades and open-pit development.
It estimates a cash cost of $638/oz (up from $618/oz previously) and all-in sustaining costs of $801/oz.
Two weeks ago, Sandstorm Gold halted any further funding to Mutiny under a Metal Purchase Agreement.
It has already provided $US6 million and had intended to provide a total of $US41 million.
In exchange, Sandstorm’s right to purchase gold from the project has been reduced from 15 per cent of output to 2.6 per cent.
Mutiny's share price jumped 0.8 cents to 4.2 cents today, after falling as low as 2.4 cents last month.
